From 1970 to 2017, the real price of eggs decreased. Which of the following would cause an unambiguous decrease in the real price of eggs?
A) A shift to the right in the supply curve for eggs and a shift to the right in the demand curve for eggs
B) A shift to the right in the supply curve for eggs and a shift to the left in the demand curve for eggs
C) A shift to the left in the supply curve for eggs and a shift to the right in the demand curve for eggs
D) A shift to the left in the supply curve for eggs and a shift to the left in the demand curve for eggs

Question

Quizplus · Accepted Answer

When there is a shift to the right in the supply curve for eggs, there is an increase in the quantity supplied of eggs, which would put downward pressure on the price of eggs. When there is a shift to the left in the demand curve for eggs, there is a decrease in the quantity demanded of eggs, which would also put downward pressure on the price of eggs. Therefore, a shift to the right in the supply curve for eggs and a shift to the left in the demand curve for eggs would cause an unambiguous decrease in the real price of eggs.

From 1970 to 2017, the Real Price of Eggs Decreased