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. 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.
Chris
Chris Hope, Judge Institute of Management Studies,
University of Cambridge, Cambridge CB2 1AG, UK.
Voice: +44 1223 338194. Fax: +44 1223 339701
e-mail: [log in to unmask]
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