Economics Assignment: Analyzing Cage-Free Egg Market Dynamics

This economics case study examines the significant shifts in the US egg industry, focusing on the transition towards cage-free eggs. It analyzes the impact of large grocers and restaurants switching to cage-free varieties, affecting both market supply and demand. The study explores how changes in consumer demand, driven by animal welfare concerns, and the increased supply of cage-free eggs have influenced equilibrium prices and quantities. It highlights the challenges faced by producers, including the substantial investment required for new facilities and the impact of consumer price sensitivity. The analysis uses data on flock sizes, pricing differences, and market trends to illustrate the complex interplay of supply and demand in the egg market, concluding with an assessment of the long-term implications of these shifts. The assignment also covers the impact of the oversupply and undersupply of eggs in the market.