Effect Identification — After Government Ban on Eggs: Statement: The government decided to ban selling of eggs in the state. Which of the following is the most likely immediate effect of this decision?
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AEggs become very costly.
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BViolent protests erupt against the government.
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CPoultry farms are badly hit.
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DPeople widely welcome the decision.
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ERestaurants add more egg dishes to menus.
Answer
Correct Answer: Poultry farms are badly hit.
Explanation
Introduction / Context:A blanket ban on selling eggs directly disrupts the egg supply chain. We must identify the most immediate and predictable effect.
Given Data / Assumptions:
- Policy: Prohibition of egg sales.
- Stakeholders: Poultry producers, wholesalers, retailers, consumers.
- Immediate horizon: short-term impact immediately following the ban.
Concept / Approach:When sales are prohibited, producers lose market access at once. Revenue stops while fixed costs continue, causing immediate distress in poultry farms. Other effects (price changes, protests, public sentiment) are contingent and not guaranteed.
Step-by-Step Solution:
1) Map supply chain: farm → distributor → retailer → consumer.2) Ban breaks farm→market link → inventory loss, wastage, cash-flow crunch.3) Therefore, farms are immediately hit.Verification / Alternative check:(a) Prices under a ban are undefined in legal markets; black-market effects are speculative. (b) Protests may or may not occur. (d) Public “welcome” is uncertain. (e) Adding egg dishes contradicts a ban.
Why Other Options Are Wrong:They depend on secondary behavioural responses, whereas farm distress follows deterministically from the sales prohibition.
Common Pitfalls:Confusing potential downstream social reactions with direct economic impact on producers.
Final Answer:Option C: Poultry farms are badly hit.