Suppose that the inverse demand for eggs is P 3001od and the

Suppose that the inverse demand for eggs is P 3-0.01od, and the inverse supply of eggs is P =-2 +0.01Q\', where Q million eggs and P-USD/egg. Now suppose that the cost of producing eggs increases due to cage-free laws, so the new inverse supply is equal to: P--2.5+0.01Q. The market-clearing price is equal to(USD/egg and the market clearing quantity is equal to (m eggs). O0.275,275 0.25, 275 0.275, 250 0.25, 250

Solution

Ans.

0.25, 250

The market-clearing price is equal to 0.25 (USD/egg), and the market clearing quantity is equal to 250 (m eggs).