Macmillan Learning Assume that we are looking at the egg market and presently the equilibrium price for a dozen eggs is $3.50 and the present equilibrium quantities are at 5 million dozen. Suppose the price of chicken feed that is fed to egg producing chickens triples in price. Which of the following best describes the impact that this would have on the egg market? Holding all other variables constant. O The supply curve would decrease shifting to the left, causing an excess demand for eggs. The market would then begin to adjust as price would increase, which causes the quantity demanded to increase and quantity supplied to decrease until the quantities demanded and supplied are equal at a new equilibrium. This new equilibrium would be at a price higher than $3.50 and at quantities less than 5 million dozen. O The supply curve would decrease shifting to the right, causing an excess demand for eggs. The market would then begin to adjust as price would increase, which causes the quantity demanded to decrease and quantity supplied to increase until the quantities demanded and supplied are equal at a new equilibrium. This new equilibrium would be at a price higher than $3.50 and at quantities less than 5 million dozen. The supply curve would decrease shifting to the left, causing an excess demand for eggs. The market would then begin to adjust as price would increase, which causes the quantity demanded to decrease and quantity supplied to increase until the quantities demanded and supplied are equal at a new equilibrium. This new equilibrium would be at a price lower than $3.50 and at quantities greater than 5 million dozen. The supply curve would decrease shifting to the left, causing an excess demand for eggs. The market would then begin to adjust as price would increase, which causes the quantity demanded to decrease and quantity supplied to increase until the quantities demanded and supplied are equal at a new equilibrium. This new equilibrium would be at a price higher than $3.50 and at quantities less than 5 million dozen.
Macmillan Learning Assume that we are looking at the egg market and presently the equilibrium price for a dozen eggs is $3.50 and the present equilibrium quantities are at 5 million dozen. Suppose the price of chicken feed that is fed to egg producing chickens triples in price. Which of the following best describes the impact that this would have on the egg market? Holding all other variables constant. O The supply curve would decrease shifting to the left, causing an excess demand for eggs. The market would then begin to adjust as price would increase, which causes the quantity demanded to increase and quantity supplied to decrease until the quantities demanded and supplied are equal at a new equilibrium. This new equilibrium would be at a price higher than $3.50 and at quantities less than 5 million dozen. O The supply curve would decrease shifting to the right, causing an excess demand for eggs. The market would then begin to adjust as price would increase, which causes the quantity demanded to decrease and quantity supplied to increase until the quantities demanded and supplied are equal at a new equilibrium. This new equilibrium would be at a price higher than $3.50 and at quantities less than 5 million dozen. The supply curve would decrease shifting to the left, causing an excess demand for eggs. The market would then begin to adjust as price would increase, which causes the quantity demanded to decrease and quantity supplied to increase until the quantities demanded and supplied are equal at a new equilibrium. This new equilibrium would be at a price lower than $3.50 and at quantities greater than 5 million dozen. The supply curve would decrease shifting to the left, causing an excess demand for eggs. The market would then begin to adjust as price would increase, which causes the quantity demanded to decrease and quantity supplied to increase until the quantities demanded and supplied are equal at a new equilibrium. This new equilibrium would be at a price higher than $3.50 and at quantities less than 5 million dozen.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Macmillan Learning
Assume that we are looking at the egg market and presently the equilibrium price for a dozen eggs is $3.50 and the present
equilibrium quantities are at 5 million dozen. Suppose the price of chicken feed that is fed to egg producing chickens triples
in price. Which of the following best describes the impact that this would have on the egg market? Holding all other
variables constant.
The supply curve would decrease shifting to the left, causing an excess demand for eggs. The market would then begin
to adjust as price would increase, which causes the quantity demanded to increase and quantity supplied to decrease
until the quantities demanded and supplied are equal at a new equilibrium. This new equilibrium would be at a price
higher than $3.50 and at quantities less than 5 million dozen.
The supply curve would decrease shifting to the right, causing an excess demand for eggs. The market would then
begin to adjust as price would increase, which causes the quantity demanded to decrease and quantity supplied to
increase until the quantities demanded and supplied are equal at a new equilibrium. This new equilibrium would be at a
price higher than $3.50 and at quantities less than 5 million dozen.
The supply curve would decrease shifting to the left, causing an excess demand for eggs. The market would then begin
to adjust as price would increase, which causes the quantity demanded to decrease and quantity supplied to increase
until the quantities demanded and supplied are equal at a new equilibrium. This new equilibrium would be at a price
lower than $3.50 and at quantities greater than 5 million dozen.
The supply curve would decrease shifting to the left, causing an excess demand for eggs. The market would then begin
to adjust as price would increase, which causes the quantity demanded to decrease and quantity supplied to increase
until the quantities demanded and supplied are equal at a new equilibrium. This new equilibrium would be at a price
higher than $3.50 and at quantities less than 5 million dozen.
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