Which of the following would cause the change shown in the following diagram of the market for burritos?

Question

BlackTom AI · Accepted Answer

First, restating the question and options to establish the context: Which of the following would cause the change shown in the diagram of the market for burritos?

Option 1: The price of Tortilla Chips, a complement, decreases.
Option 2: The price of a Burrito increases.
Option 3: The number of Mexican restaurants increases.
Option 4: The price of Gyros, a substitute, decreases.

Now, analyze each option in turn:

Option 1 reasoning: A decrease in the price of a complement (tortilla chips) makes burritos more attractive to consumers because these goods are typically consumed together. This tends to increase the quantity demanded of burritos at every price, shifting the burritos demand curve to the right. This matches a scenario where the observed change in the market results from a demand-side shift driven by a related good’s price change, which aligns with the depicted movement in many burritos-market diagrams.

Option 2 reasoning: If the price of burritos themselves changes, that creates a movement along the existing burrito demand curve (a change in quantity demanded), not a shift of the entire demand curve. The chart illustrating a market-wide change (demand or supply shift) would not be explained simply by a price change of the burrito; it would be a movement along the curve, which is not the type of shift shown in the diagram.

Option 3 reasoning: An increase in the number of Mexican restaurants would raise overall demand for burritos, shifting the demand curve to the right. This is also a plausible cause of a market change. However, if the question asks for the single best cause corresponding to the specific depicted change, and the provided context emphasizes a change due to complements, this option may be considered secondary to the complement effect depending on the diagram’s direction.

Option 4 reasoning: If a substitute good (gyros) becomes cheaper, some consumers may switch away from burritos to gyros, reducing burrito demand. This would shift the burrito demand curve to the left, opposite of a rightward shift. Therefore, this option cannot explain a depicted increase in burrito demand and is inconsistent with a rightward shift.

In sum, option 1 correctly identifies a complement’s price decrease as a driver of a rightward shift in burritos demand, which is a common cause of the observed market change in such diagrams. The other options either describe movements along a curve (option 2), alternative but less directly matching demands (option 3), or an opposing shift (option 4).

ECON 2002.01 SP2025 (25230) Quiz 3

Which of the following would cause the change shown in the following diagram of the market for burritos?

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ECON 2002.01 SP2025 (25230) Quiz 3

Which of the following would cause the change shown in the following diagram of the market for burritos?

View Explanation

Log in for full answers

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