The following questions are about long-run equilibrium in the market for cage-free eggs.
a. As described in the chapter opener, was the market for cage-free eggs in 2015 in long run equilibrium? Briefly explain.
b. What would we expect to happen to the price of cage-free eggs and the quantity of cage-free eggs produced in the long run? Briefly explain.
c. In January 2015, California began requiring that all eggs sold in the state be cage-free. Dunkin' Donuts also announced that it would eventually use only cage-free eggs in its breakfast sandwiches nationwide. Other firms made similar announcements. What effect will this increased demand have on the long-run price of cage-free eggs? Briefly explain.