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Sam D.
 
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Default Why is beef so expensive?


"Steve Wertz" > wrote in message
...
> On 08 Jan 2004 00:46:12 GMT, (Cdonahey41) wrote:
>
> >The price went way up before the mad cow problems/ Since there is lot of

beef
> >that can no longer be exported, this should indicate the price of beef

will go
> >down. You know greater supply, lower price kind of reasoning. I just

paid
> >$3.29 for ground chuck recently.

>
> Think of them as cigarettes. The less poeple smoke, the higher the
> price.


In a totally free market, the opposite would hold true. In a market where
sales are declining and the capacity exists to increase the supply, the
price would be reduced in order to stimulate demand and attract more sales.

Tobacco is not a good example of the relationship between supply and demand.
The price is grossly and artificially inflated by taxes. If a
correspondingly similar1200% tax was placed on lettuce, the sales of lettuce
would rapidly diminish. But not so with cigarettes because a large
percentage of tobacco consumers are so hopelessly addicted that they are
willing to pay nearly any price for their smokes. So the demand for
cigarettes among existing smokers is not influenced by changes in price in
the same way as with most items.