Firstly, the budget, income, and substitution has an influence on the current situation on the beef market and affect the grill’s popularity simultaneously. Firstly, the earnings and budget of the household control the consumption of the particular products and behavioral patterns (Pagoso, Dinio and Villasis 89). In turn, various meat substitutes are present including direct and indirect competition. Additionally, people can select other methods of the meat preparation such as cooking at home. Furthermore, the restaurant and cafes, which offer the various dishes with meat, can be considered as the potential threat to the beef consumption. In this instance, the presence of these matters can negatively influence the demand due to the inability to provide affordable prices for the current income and the lack of ability to minimize the threats from the substitutes.
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It remains evident that the beef and grill’s markets are interdependent due to the necessity to be used at the same time for some cases. In turn, the increasing popularity of the grills might be a core reason for the escalation in the beef consumption disregarding its high prices and rarity. Furthermore, the increased costs of beef are the primary drivers of the growth of the prices for grills due to the interdependency of the components. Additionally, the concept of marginal utility is applicable, as the positive marginal utility implies the increase of the consumption of the additional good maximizes the popularity of the initial product among consumers (Jain and Ohri 92). In this case, the amplified demand is correlated with the marginal utility, as the customers are highly satisfied with the consumption of the products, which are promoted by the celebrity. In turn, the demand for beef increases the demand for grills and vice versa.
Nonetheless, the rationality of the customer’s choices is questionable, as it is highly affected by the psychological influence. It remains apparent that the companies use celebrities to modify the perceptions of the customers by using authorized views (Pringle 77). In this instance, the demand for the beef and grills is driven by the promotion of the products by George Foreman. In this situation, the actions of the customers are logical from the psychological perspective due to the high influence of the authorities on the process. Nonetheless, the rationality of the consumer’s desire to purchase beef is questionable, as the prices tend to grow. In the context of this case, despite the ability of the prices to have a significant influence on demand, the role it was revealed that various social and psychological factors tended to affect the purchasing abilities of the customers (Antonides 51).
Lastly, it remains evident that the prices of the final product are dependent on the costs of the resources, which are vital for the production (Johanson, Lundberg and Ryberg 16). In turn, the natural hazards caused the dramatic loss of cattle due to the presence of the increased levels of death in its population (“Economist Beef Prices”). Consequently, the presence of these matters was a primary reason for the rise in the prices due to the scarcity of the production resources and the presence of the adverse external factors. Nonetheless, it remains evident that the situation will stabilize as the farm slowly regaining the missing population of the cattle. Nevertheless, it might slightly increase due the fluctuations in the prices of the products, which are required to feed the domestic animals.
Antonides, Gerrit. Psychology in Economics and Business: An Introduction to Economic Psychology, Berlin: Springer Science+Media, 2013. Print.
“Economist Beef Prices Can Stay High into 2015.” Clipsyndicate. Clipsyndicate, 2014. Web.
Jain, Tehli, and Veil Ohri. Principles of Economics, New Delhi: VK Publications, 2010. Print.
Johanson, Kaj, Peter Lundberg and Robert Ryberg. A Guide to Graphic Print Production, Hoboken: John Wiley & Sons, 2012. Print.
Pagoso, Christonal, Rosemary Dinio and George Villasis. Principles of Economics, Manila: Rex Book Store, 2008. Print.
Pringle, Hamish. Celebrity Sells, Hoboken: John Wiley & Sons, 2004. Print.