Topic > Why should the price of free range eggs increase?
If the maximum price is above the equilibrium price, there is no influence on the market because people already pay below that price. But if the maximum price of free-range eggs is lower than the equilibrium price, this will have a huge effect on the market. First, the quantity demanded of free-range eggs will increase and the quantity supplied will decrease due to falling prices, and a shortage of free-range eggs will occur. Second, both consumer surplus and producer surplus will decrease, which will cause an inefficient market for free-range eggs (Parkin & Bade 2016, p. 179-181). Which can also be seen in the graph
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