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Food and Nutrition EconomicsFundamentals for Health Sciences$
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George C. Davis and Elena L. Serrano

Print publication date: 2016

Print ISBN-13: 9780199379118

Published to Oxford Scholarship Online: November 2017

DOI: 10.1093/oso/9780199379118.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 30 July 2021

Production and Profit Beyond the Farm Gate

Production and Profit Beyond the Farm Gate

(p.179) 13 Production and Profit Beyond the Farm Gate
Food and Nutrition Economics

George C. Davis

Elena L. Serrano

Oxford University Press

Chapter 13 first looks at how changes at one level in the food supply chain may affect prices and quantities at another level via profit maximization. The chapter then considers firms that are closer to the consumer (e.g., restaurants) who will often be able to set their own prices and consider the analytics of profit maximization under this scenario. Utilizing this framework, the chapter considers the question: Are healthier foods more or less profitable than unhealthy foods? This leads naturally to a discussion of market segmentation, the limit of the market, and the distribution of healthy and unhealthy foods in the food system. As there are many calls for food firms to be more socially responsible and offer healthier foods, the chapter utilizes the framework to explore the implications of corporate social responsibility and how compatible that idea is with profit maximization.

Keywords:   upstream firm, downstream firm, price making firm, fast casual, market segmentation, corporate social responsibility

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