A man eats two eggs each morning for breakfast. When he goes to the
grocery store he pays Rs. 6 a dozen. Since a dozen eggs won’t last a
week he normally buys two dozens at a time. One day while buying eggs he
notices that the price has risen to Rs. 7. The next time he buys
groceries, eggs are Rs. 7.5 a dozen.

When asked to explain the price of eggs the store owner says, “The price
has gone up and I have to raise my price accordingly”. This store buys 100
dozen eggs a day. He checked around for a better price and all the
distributors have raised their prices. The distributors have begun to buy
from the huge egg farms. The small egg farms have been driven out of
business. The huge egg farms sell 100,000 dozen eggs a day to
distributors. With no competition, they can set the price as they see fit.
The distributors then have to raise their prices to t he grocery stores.
And on and on and on.

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