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From 1970 to 2010, the real price of eggs decreased and the total annual consumption of eggs decreased. Which of the following would cause an unambiguous decrease in the real price of eggs and an unambiguous decrease in the quantity of eggs consumed? Select one:

a. A shift to the left in the supply curve for eggs and a shift to the right in the demand curve for eggs.

b. A shift to the left in the supply curve for eggs and a shift to the left in the demand curve for eggs.

c. none of the other choices is correct

d. A shift to the right in the supply curve for eggs and a shift to the right in the demand curve for eggs.

2 Answers

7 votes

Final answer:

The question asks for a scenario that would result in a decrease in both the real price of eggs and the total annual consumption of eggs. The correct answer is Option b: a simultaneous leftward shift in both the supply and demand curves, which leads to an unambiguous decrease in the equilibrium quantity and an ambiguous impact on price, but given the historical data on actual price decrease, this would be the cause.

Step-by-step explanation:

To determine the cause of an unambiguous decrease in both the real price of eggs and the total annual consumption of eggs, we need to consider the effects of shifts in both the supply and demand curves. Let's review the given options:

  • Option a: A leftward shift in the supply curve would typically increase the equilibrium price, while a rightward shift in the demand curve would increase both the equilibrium price and quantity.
  • Option b: A leftward shift in the supply curve would increase the equilibrium price and decrease the equilibrium quantity. A leftward shift in the demand curve, however, would decrease both the equilibrium price and quantity. Therefore, a simultaneous leftward shift in both the supply and demand curves for eggs would result in an ambiguous change in the equilibrium price but an unambiguous decrease in the equilibrium quantity.
  • Option c: This option suggests that none of the other choices would lead to both a decrease in the real price and quantity consumed of eggs, which aligns with our assessment of options a and b.
  • Option d: A rightward shift in the supply curve would lead to a decrease in the equilibrium price and an increase in the equilibrium quantity, whereas a rightward shift in the demand curve would increase both the equilibrium price and quantity.

Given these analyses, the correct answer is Option b: A shift to the left in the supply curve and a shift to the left in the demand curve for eggs. This is the only scenario provided that could lead to a decrease in both price and quantity consumed.

User TRUE
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7.2k points
3 votes

Answer:

The correct answer would be Option C, None of the other choices are correct.

Step-by-step explanation:

Demand and supply curves are plotted on a graph containing quantity and price of the product on x axis and y axis respectively. The intersection of demand and supply curves give us the accurate quantity at an accurate price of the product. Any shift of the curve will result in the surplus or shortage of the product. So in this question, it is asked the reason for the decrease in the quantity of eggs consumed. So the answer is A shift to the right in the supply curve for eggs and a shift to the left in the demand curve for eggs will result in an unambiguous decrease in the quantity of eggs consumed.

User Moshe Perez
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6.2k points