This is a two-part case study. In the first part you will apply your knowledge of supply and demand, elasticity and total revenue, utilising the fundamental tools, methods and language of economics to analyse a resource allocation issue within the case study. In the second part you will applying your knowledge of markets and examine the impact of incentives within the case study. You will be required to use economic models to illustrate how the agents and markets described in the case study respond to incentives. You will also need to identify the limitations of the market mechanism and analyse the role of the government in affecting markets and decision-making in the general economy as it applies to the case study.

ARTICLE

Producers are warning consumers that the shortage could extend over a number of months and that prices could also increase.

In a number of areas, the shortage is due to producers reducing the size of their flock to deal with the reduced demand over the peak of the pandemic. Demand for eggs has since risen as Covid restrictions ease, borders reopen and hospitality venues welcome back customers.

Tasmania's Pure Foods Eggs chief executive officer Kate Daley told ABC news that the shortage could last for a majority of 2022 as producers wait for their next flock of hens to be ready to begin laying."It takes months of planning to organise a chicken hatch date, and from the time the chicken emerges from its egg, it takes around 20 weeks before they are able to start laying eggs," she said."It's likely that there will be a shortage for much of 2022 until new flocks of hens start laying."

Flooding and an increase to input costs are also believed to have contributed to egg shortages in a number of areas. Producers are warning that the price of eggs are predicted to increase to accommodate the rise in input costs.