Why are brown eggs more expensive than white ones in some countries?
According to the US egg Nutrition Center in Washington, DC, neither the taste of an egg nor its nutritional quality depends on the colour of its shell. So why then are the prices different?
Production costs of brown eggs are a bit higher that white ones so it is obvious that we have to pay more. Why? Because hens that produce brown eggs are slightly bigger so they have more body mass and they need more food (the company has to spend more money on them).
Production costs of brown eggs are a bit higher that white ones so it is obvious that we have to pay more. Why? Because hens that produce brown eggs are slightly bigger so they have more body mass and they need more food (the company has to spend more money on them).
In sum, unless some people want to buy brown eggs and are willing to pay more, they won't be offered for sale.
When?
ReplyDeleteNow I'm really getting curious! ;-)
ReplyDeleteThe prices of any product is determined primarily by two factors - the cost of production and demand for product. Higher the cost of the product higher is the minimum price charged by the manufactures. No manufacturer will produce and sell a product if the product has to be sold at a price lower than its cost.
ReplyDeleteThe demand of a product, the other factor determining price, is itself determined by the utility offered by the product. And when we talk of utility, we need to consider the utility to individual consumer as well as the number of consumer who derive the utility. For example, in India, brown eggs are considered more nutritious and also less allergic. Because of this brown eggs are considered more suitable for people suffering from some specific medical problems. Among general public, only people with lot of money are willing to pay the extra price for the brown eggs. People with limited financial resources prefer to by the more economical variety. Thus some people are willing to pay considerably higher price for brown eggs, but the total demand is quite low.
From the above discussion it is clear that brown eggs are priced higher becaause the cost of production of these eggs is higher, at the same time some people believe that they derive higher utility from them and, therefore are willing to pay higher price.
It is interesting to note that if the total demand for brown eggs was considerably higher, it may have induced producers to produce much larger quantities of brown eggs at lower unit cost, resulting from economy of scale. This in the end could have led to the prices coming down, rather than increase, with increasing demand. We can see phenomenon like this in many industries. For example in India, the prices of mobile phones has been coming down steadily with increasing demand.