The below figure shows the demand and supply curves in the market for gasoline. The price and quantity at the point of intersection of the demand and supply curves is $30 and 300 gallons respectively.Figure 3.6

-In the market for eggs, a removal of the price ceiling on eggs results in:
A)an increase in the demand for eggs.
B)farmers supplying more eggs to the market.
C)consumers demanding a larger quantity of eggs.
D)farmers supplying less eggs to the market.
E)consumers demanding a smaller quantity of eggs.

Question

The below figure shows the demand and supply curves in the market for gasoline. The price and quantity at the point of intersection of the demand and supply curves is $30 and 300 gallons respectively.Figure 3.6
 
-In the market for eggs, a removal of the price ceiling on eggs results in:
A)an increase in the demand for eggs. 
B)farmers supplying more eggs to the market. 
C)consumers demanding a larger quantity of eggs. 
D)farmers supplying less eggs to the market. 
E)consumers demanding a smaller quantity of eggs.

Quizplus · Accepted Answer

A removal of the price ceiling on eggs means that the market is allowed to reach its equilibrium price and quantity, which may be higher than the price ceiling. This would provide an incentive for farmers to supply more eggs to the market because they can now sell their eggs at a higher price. As a result, the supply of eggs would increase, shifting the supply curve to the right. This would lead to a higher quantity of eggs being supplied to the market.

The Below Figure Shows the Demand and Supply Curves in the Market