Tuesday, September 1, 2009

What will happen to the demand for organic food?

Suppose that this is true... what will happen to the marginal benefits (demand) that consumers receive from organic foods? Price effect? and then...?


Anonymous said...

if studies show that organic food is not healthier for you then consumers will get less benefit from purchasing organic foods. marginal benefits will decrease and shift demand to the left. this will cause the price of organic food to drop and suppliers will be less willing to bring product to the market.

-sara casey

Anonymous said...

From what I can tell, the article is arguing that the UK's Food whatever agency is false in its claim that organic foods are not inherently better than non-organically produced goods. If people agree with the author's position, which portrays the study as skewed and biased, then the article could have an effect on its readers that stimulates a preference for organics. If the reader believes the "scientific study", then their preference won't likely be altered by the article (or perhaps, if they were buying organic they will switch back to inorganic?). If there is more demand for organic food, the price will inevitably go down a bit, but it will never be competitive with non-organic foods because the costs of production (especially labor and organic pesticide/fertilizer costs) are significantly higher. - N

Anonymous said...

The studies that show organic foods as being equal to inorganic food might lower the perceived benefit of the product, but what about the real benefit (if the studies are wrong). What about the increased cost of healthcare due to cancer caused by consumption of hazardous chemicals used to grow food? So these are external costs not taken into account on the supply/demand graph. Supposing the studies are true, though, and there are no health costs associated with inorganic foods, then sara casey is correct.