Why Grass-Fed Beef Is on a Roll
by: Ellen Byron and Sarah Nassauer
Sep 21, 2016
Click here to view the full article on WSJ.com
by: Ellen Byron and Sarah Nassauer
Sep 21, 2016
Click here to view the full article on WSJ.com
TOPICS: Adverse selection, Supply and Demand
SUMMARY: Once a niche luxury, grass-fed beef is showing up in ballpark burgers and on Wal-Mart shelves. People splurge on the leaner meat despite questions about its labeling and flavor.
CLASSROOM APPLICATION: Students can examine the reasons for the increased demand for grass-fed beef. They can also discuss whether adverse selection is an issue in the industry, which leads for the call from some grass-fed beef producers for strict labeling standards.
QUESTIONS:
1. (Introductory) Why are people willing to pay more for grass-fed beef than for conventional beef?
2. (Introductory) What is the effect of the increased demand for grass-fed beef on the equilibrium price and quantity of grass-fed beef?
3. (Advanced) Define adverse selection. Would the grass-fed beef market be subject to adverse selection?
4. (Advanced) Why do grass-fed beef producers with strict standards call for strict grass-fed beef certification?
1. (Introductory) Why are people willing to pay more for grass-fed beef than for conventional beef?
2. (Introductory) What is the effect of the increased demand for grass-fed beef on the equilibrium price and quantity of grass-fed beef?
3. (Advanced) Define adverse selection. Would the grass-fed beef market be subject to adverse selection?
4. (Advanced) Why do grass-fed beef producers with strict standards call for strict grass-fed beef certification?
Reviewed By: James Dearden, Lehigh University
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