Prime grade beef is the absolute highest quality beef available, graded by the USDA. This is a very rare, and thus very expensive, only averaging about 3% of all carcasses. The beef has very minor, but a good amount of fat running through the meat, resulting in an amazingly juicy and tender cooked piece of meat.
The filet mignon is a cut taken from the smaller end of the tenderloin, usually of a steer. The tenderloin is located in the back half of the steer, and is the least worked piece of meat and it is not a weight-bearing portion of the steer, which results in less connective tissue, and more leaner and tender cut of meat. This makes the tenderloin the most expensive of all cuts of meat.