--- Chris Hope <[log in to unmask]> wrote:
> At 03:38 PM 4/3/01 -0700, you wrote:
> >--- Chris Hope <[log in to unmask]> wrote:
> >
> >> Of course in the EU, it doesn't happen like that. The farmers are
> being
> >> fully compensated for any economic losses, and so the price of meat
> will
> >> not go up. But in the more market-driven USA, maybe PETA have a
> point.
> >
> >Hmmm, I don't know about this. The supply will be reduced (an inward
> >shift of the supply curve) which implies an increase in the price
> >irrespective of compensation. Of course and increase in the current
> price
> >will inevitably lead to more animals being raised for slaughter in the
> >future.
> >
> >Steve
> >
>
> Are you sure about this, Steve? If the price goes up, but the costs of
> production go up even more (because a certain proportion of animals have
> to
> be slaughtered and burnt rather than slaughtered and sold), then the
> incentive to raise more animals would seem to disappear.
Yes, so long as those producers who had to slaughter and burn are
compensated for their loss. Also, a higher price will encourage new
entrants into the market.
Of course, if the compensation is only a % of the loss then the effect is
lessened.
Combine this
> with
> the reduction in demand as the price rises and the net result would seem
> to
> be less meat consumed and fewer animals raised.
Initially, yes less meat would be consumed. The increase in supply will
push the price back down, perhaps even below the pre-disease levels
encouraging more meat consumption.
Steve
=====
"In a nutshell, he [Steve] is 100% unadulterated evil. I do not believe in a 'Satan', but this man is as close to 'the real McCoy' as they come."
--Jamey Lee West
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