Explain how the equilibrium price and quantity sold of eggs will change in the following cases. Remember that they need not move in the same direction.

(a) An outbreak of food poisoning is traced to eggs.

(b) Scientists breed a new chicken that lays twice as many eggs each week.

(c) A popular talk show host convinces her viewers to eat an egg a day.

Question

Business

Alonzo Middleton

31 October, 02:54

Explain how the equilibrium price and quantity sold of eggs will change in the following cases. Remember that they need not move in the same direction.

(a) An outbreak of food poisoning is traced to eggs.

(b) Scientists breed a new chicken that lays twice as many eggs each week.

(c) A popular talk show host convinces her viewers to eat an egg a day.

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Answers (1)

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Joseph Eaton · Answer 1

a. Both the equilibrium quantity as well as equilibrium price will decline.

b. The equilibrium price will fall while the equilibrium quantity will increase.

c. Both the equilibrium price as well as equilibrium quantity will increase.

Explanation:

a. If an outbreak of food poisoning is traced to eggs, this will cause the demand for eggs to decline. The demand curve will move to the left. Both the equilibrium quantity as well as equilibrium price will decline.

b. Scientists breed a new chicken that lays twice as many eggs each week. This will cause the supply of eggs to increase. The supply curve will move to the right. As a result, the equilibrium price will fall while the equilibrium quantity will increase.

c. A popular talk show host convinces her viewers to eat an egg a day. This will cause the demand for eggs to increase. The demand curve will move to the right. As a result, both the equilibrium price as well as the equilibrium quantity will increase.