In a post depicting empty grocery store egg shelves on X last month, Federal Trade Commission (FTC) Commissioner Alvaro Bedoya suggested producers could be exercising market power to reap ill-gotten profits by keeping prices elevated. In a new insight, Director of Competition Policy Fred Ashton explains why the laws of supply and demand offer a more plausible and straightforward explanation for the increased prices.

He concludes:

The outbreak of avian flu in late 2021 sent the prices of eggs soaring over 80 percent and 53 percent in just the last 12 months.

FTC Commissioner Bedoya suggested that sky-high egg prices could be the result of market power and called upon the FTC to investigate. It is more likely that the reduced supply – largely driven by the length of time it takes to replenish the laying flock – and the inelasticity of the supply and demand curve were the culprits behind higher prices, rather than market power.

Read the analysis.