Egg producers in a local area set up, with government approval,
an Egg Marketing Board which establishes "fair" prices for eggs.
Output quotas are established for existing producers, and all
others are prohibited from selling eggs in the area. These
output quotas
1. inevitably leave a surplus that the
government has to absorb.
2. cause the supply curve of output to
shift upward.
3. enable egg producers to sell every
unit of their output at a price at or above its production cost.
4. do none of the above.
Choose the option that yields the correct answer.