The difference in production costs between a dozen cage-free eggs and a dozen normal eggs is 19 cents. But the cage-free eggs can cost nearly $2 more.
Big supermarkets use cage-free as a price discrimination tool - targeting them to richer customers who are willing to pay more.
Poorer customers, even if they care a lot about animal welfare, end up buying the normal eggs.
But when states pass laws banning caged eggs, the markup disappears.