The article states that consumers lower the amount they are prepared to pay for each extra unit of a product. Why do they do this?
Explain what is meant by product differentiation and how it may benefit producers.
Two food products are being sold. The producers of one product carry out research to make it safer and raise its price to pay for that research. The producers of the other try to protect their market share by cutting its price. Show the effects of these changes using a budget line diagram.
The article says that producers have adapted to changes in demand and now emphasise the health aspects of their food products Does the evidence show that the market will always achieve the most efficient allocation of resources in food production?