Suppose that the market for eggs is intially perfectly competitive

a) Draw a supply and demand diagram showing the equilibrium quanitity of eggs produced and the market price Be sure to label all parts of your diagram

b) on your diagram from Part a) label the consumer and producer surplus

c) suppose that the governemt permits an industry association to form which issues production quotas to each egg farmer. If the sum of the quotas issued is les than the competitive market quantity you described in part a) draw a new supply and demand diagram to show the effect of the quota systme on the market price and quantity of eggs.

d) on your diagram from Part c label the consumer and producer surplus how have consumer and producer surplus changed as a result of the quota systems?