Suppose eggs are produced competitively, and that the egg industry is a constant cost industry.
a. Fill in the table with appropriate responses (increases, decreases, no change) in response to each of the following events:

b. Which event has a permanent effect on the price of eggs, and which does not?
c. How would your answer to (b) change if the egg industry were a decreasing cost industry?

Transcribed Image Text:

Event Demand for eggs increases Cost of corn (an input into egg Short-run effect on price Long-run effect on price production) decreases