THE DOMESTIC MARKET

1. THE DOMESTIC MARKET

2. US POPULATION

3. FACTORS THAT INFLUENCE DOMESTIC DEMAND A LOOK AT LIVESTOCK PRODUCTS

4. Shifts in Consumptionfor Meat

5. WHAT HAS IMPACTED U.S. MEAT CONSUMPTION CONSUMER TASTES AND PREFERENCES

6. WHAT HAS IMPACTED U.S. MEAT CONSUMPTION CONSUMER TASTES AND PREFERENCES • HEALTH (LOW FAT POULTRY)

8. WHAT HAS IMPACTED U.S. MEAT CONSUMPTION CONSUMER TASTES AND PREFERENCES • HEALTH (LOW FAT POULTRY) DEMOGRAPHICS

9. WHAT HAS IMPACTED U.S. MEAT CONSUMPTION CONSUMER TASTES AND PREFERENCES • HEALTH (LOW FAT POULTRY) DEMOGRAPHICS • AGE

11. WHAT HAS IMPACTED U.S. MEAT CONSUMPTION CONSUMER TASTES AND PREFERENCES • HEALTH (LOW FAT POULTRY) DEMOGRAPHICS • AGE • RACE AND ETHNIC BACKGROUND

13. “However, dietary choices of people of various ethnic groups living in the United States continue to be influenced by the traditional food practices and/or religious customs. For example, many Asian Americans still eat a diet similar to traditional Asian diets, which include large amounts of rice accompanied by vegetables, soy products, fish and meat. Many Hispanic Americans continue to eat a diet based primarily on beans, rice, and corn tortillas, seasoned with chili peppers and accompanied by beef, pork and chicken and small amounts of dairy products.”

14. WHAT HAS IMPACTED U.S. MEAT CONSUMPTION CONSUMER TASTES AND PREFERENCES • HEALTH (LOW FAT POULTRY) DEMOGRAPHICS • AGE • RACE AND ETHNIC BACKGROUND • CHANGE IN HOUSEHOLD STRUCTURE

17. WHAT HAS IMPACTED U.S. MEAT CONSUMPTION CONSUMER TASTES AND PREFERENCES • HEALTH (LOW FAT POULTRY) DEMOGRAPHICS • AGE • RACE AND ETHNIC BACKGROUND • CHANGE IN HOUSEHOLD STRUCTURE • INCOME SHIFTS

18. WHAT HAS IMPACTED U.S. MEAT CONSUMPTION CONSUMER TASTES AND PREFERENCES • HEALTH (LOW FAT POULTRY) DEMOGRAPHICS • AGE • RACE AND ETHNIC BACKGROUND • CHANGE IN HOUSEHOLD STRUCTURE • INCOME SHIFTS • NEED FOR CONVENIENCE

21. The Demand for a Product the Law of Demand as prices go up -- quantity demanded goes down (all other things remaining unchanged)

22. Demand Schedule Price Quantity $1.00 1000 $2.00 900 $3.00 800 $4.00 700

23. Demand Curve price a b quantity

24. Why downward sloping? Physical Satiation Substitution effect Income effect

25. ELASTICITY OF DEMANDTHE RESPONSIVENESS CONSUMERS ARE TO A CHANGE IN PRICE

26. ELASTICITY OF DEMAND% CHANGE IN QUANTITY DEMANDED/% CHANGE IN PRICE

27. ELASTICITY OF DEMANDIN THE CASE OF THE PRICE ELASTICITY OF DEMAND THIS IS A NEGATIVE NUMBER

28. ELASTICITY OF DEMANDELASTIC VS INELASTIC

29. ELASTICITY OF DEMAND DEMAND PRICE VERY INELASTIC QUANTITY

30. ELASTICITY OF DEMAND DEMAND PRICE ELASTIC QUANTITY

31. ELASTICITY OF DEMAND NECESSITY VS NON-NECESSITY

32. NECESSITY VS NON-NECESSITY % OF INCOME SPENT ON A GOOD

33. ELASTICITY OF DEMAND HOW NARROWLY THE PRODUCT IS DEFINED

34. Equilibrium supply price p demand quantity

35. DEMAND SHIFTERS S PRICE D2 D1 QUANTITY

36. DEMAND SHIFTERS

37. DEMAND SHIFTERS • SHIFTS IN POPULATION

38. DEMAND SHIFTERS • SHIFTS IN POPULATION • SHIFTS IN INCOME

39. INCOME AND CHANGES IN CONSUMPTION --- CAN BE POSITIVE (A NORMAL GOOD) OR NEGATIVE (INFERIOR GOOD)

40. A NORMAL GOOD: INCOME GOES UP --- CONSUMPTION INCREASES INCOME GOES DOWN -- CONSUMPTION GOES DOWN

41. INFERIOR GOOD : INCOME GOES UP -- CONSUMPTION DECLINES INCOME GOES DOWN -- CONSUMPTION INCREASES

42. Income Elasticity% Change in Expenditure/% Change in Income

43. Income ElasticityCan be negative (inferior) or positive (normal)

44. DEMAND SHIFTERS • SHIFTS IN POPULATION • SHIFTS IN INCOME • SHIFTS IN THE PRICE OF COMPETING PRODUCTS

45. GOODS MAY BE SUBSTITUTES OR COMPLEMENTARY OR INDEPENDENT

46. SUBSTITUTE GOODS WOULD BE LIKE COFFEE AND TEA IF THE PRICE OF COFFEE INCREASES THE DEMAND FOR TEA WOULD SHIFT OUT.

47. COMPLEMENTARY GOODS ARE GOODS THAT ARE CONSUMED TOGETHER -- LIKE BACON AND EGGS. IF THE PRICE OF BACON INCREASES THE DEMAND FOR EGGS MAY SHIFT INWARDS.

48. INDEPENDENT GOODS HAVE NO APPARENT RELATIONSHIP. A PRICE CHANGE IN ONE HAS NO IMPACT ON THE DEMAND FOR THE OTHER.

49. Cross Price Elasticity% Change in Consumption of Good B/% Change in Price of Good A

50. Cross Price ElasticityCan be positive or negative.