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    Hi all,

    Can you elaborate, how to touch this question? What is examiner looking for?

    “Mastitis costs the UK dairy farmer £96 million every year, and lameness £44 million a year. We must put more money into mastitis control.” (Actual statement by a senior veterinarian). As an economist, use basic concepts and relationships to explain how you would respond to the statement.

    Please share your views.

    Thanks
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    (Original post by warda2009)
    Hi all,

    Can you elaborate, how to touch this question? What is examiner looking for?

    “Mastitis costs the UK dairy farmer £96 million every year, and lameness £44 million a year. We must put more money into mastitis control.” (Actual statement by a senior veterinarian). As an economist, use basic concepts and relationships to explain how you would respond to the statement.

    Please share your views.

    Thanks
    We are getting a looooot of extremely specialised questions in this subforum recently

    The statement identifies something which is increasing the cost of production for a farmer, hence mastitis and lameness reduce the quantity of cattle supplied and increase the equilibrium price of the cattle. Funnelling money towards mastitis control is in essence a policy of investing in improving productivity. In doing so, the supply curve shifts rightwards back towards a state with no Mastitis (see your typical supply-demand diagram mapping quantities supplied/demanded at differing prices). As it doesn't cost farmers as much to raise the same level of cattle, more cattle is supplied at the same price point as before. You therefore get more cattle supplied and at a cheaper price at equilibrium if demand for cattle remains the same.

    If you want to look at higher-level points, consider who is actually putting money into mastitis control. Is it the farmers? Is it the government? If it's the farmers, they may not be keen if it's going to cost them more to reduce mastitis than the cost benefits gained. If it's the government, that could reduce spending in other areas of public spending such as healthcare, education etc. How effective is the investment in actually reducing cases of mastitis (i.e. is the science and technology to do so mature)? In other words, explore the viability of mastitis control in achieving its target of reducing farmer costs.

    Hope that helps!
 
 
 
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