Genetically Modified Food Faces Severe Acceptance and Regulatory Externalities on the Path to Reaching Market Equilibrium

Abstract

Every product aspires to reach market equilibrium which is an economic state of the product where there is stable production and demand for the product. That means the product is firmly established in a market with sizeable clientele. To reach this state, the product needs to pass through layers of regulatory control with the extent depending on the type of product. In the case of food products, there will be regulations on its composition, preparation conditions, storage conditions, and retail format. Cast these regulatory controls on the nascent genetically modified food category (or GMO food), it can be seen that GMO food faces severe acceptance and regulatory externalities in their path to reach market equilibrium. Depending on the culture, scientific awareness, and regulatory controls of the society, some GMO food may not reach market equilibrium, and will thus be eliminated by market forces.

Keywords: market equilibrium, genetically modified food, regulatory externalities, acceptance test, stable production and demand,