According to the article linked to below, the demand for offal has risen by 15% in France since the investment bank Lehman Brothers went out of business. Over the same time period French butchers have faced a 2.6% fall in the demand for beef. So is the global financial crisis set to make offal merchants rich?
Recipes for the recession bring offal back into fashion in France Times Online (20/11/08)
Let them eat offal Guardian (20/11/08)
- Given the recession in France, as what types of good would you classify (a) offal and (b) beef?
- What values would you expect for the income elasticity of demand for (a) offal and (b) beef?
- What are the principal determinants of the demand for offal?
- Using diagrams as appropriate, explain the changes that have taken place in the market for offal in recent months.
- Discuss the extent to which the increase in demand for offal has been caused by the promotional strategies adopted by The National Federation of French Offal Merchants.