Consumer protection and competition policy
The Consumer information reduces risk of anti-competitive market.
Consumer protection and competition policy are play a very important role in situation when a market starts to fail. Where a market fails it is observed that such failure is caused by failed regulation or consumers failing confidence. So some kind intervention is necessary when such failure arises. When such intervention is made it becomes necessary to check what lead to a market failure. Every market failure has its own causes and can be resolved by remedies which are appropriate for such failure.
One of such reason for failure is lack for consumer information. Even if there is competition in the market but consumer doesn’t have enough
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But it is not completely true as they tend to lack encouragement to do the same. Competition policy are largely concentrate on the maintaining a look over the firms where they tend to miss out on the aspect that it is consumer conduct is one of the important things on which competition policy should also be made on. In most of the markets it is always assumed that business and consumer have optimal level of information about the goods and services that are available in the market. Generally we can see that it’s hard to find to find examples where market failure is because of the information failure because in current market large amount of advertisement is done, so that people know what kinds are goods available in the …show more content…
had made an anti competitive agreement between themselves. That was in violation of Article 81 of the EU Treaty and, where punished a hefty fines that was amounting Euro 9,743,000.an investigation was done which provided with information that from period 2000 to 2004, these companies adopted. There was parallel behaviour between them and the price of the milk compare to the other nations was higher than those in other European nations.
The procedure began on july, 8 2004, number of interventions were made by the Italian ministry, which lead to fall in price of the milk fall by 25% within a period of month. These reduction lead to further information availability to the consumers such as type of milk products, character of ingredients used, proper advertisement to the consumer and new goods with lowered
They believe consumers contribute
Also, they need to be careful from not enforcing the client from buying goods that they do not want. It must not restrict to whom the consumer will sell these products. Businesses must be very careful with price discrimination, from lowering their prices really low to drive competitors out of the market, and trying to control the final price for retail stores (181-185). The second obligation is that a business should not advertise false statements, not sell goods for original price if it indicated that the item is on special or reduced price, and not lie to consumers about the performance of a product
When developing a new product or service to sell to the public, it is good for a business to consider whether there is a market. If there is, it could determine if the product or service will be successful. It is likely that businesses will have competitors within the same market competing to sell their goods to customers as well. Market Share:
The Federal Trade Commission’s primary aim is keeping markets fair and competitive. On their website, they state their mission is to: “… enforce the rules of the competitive marketplace — the antitrust laws. These laws promote vigorous competition and protect consumers from anticompetitive mergers and business practices. ”1 Competition keeps a market healthy and growing, its effect is what Adam Smith called ‘the invisible hand’, which sets the ‘natural price’ by allowing consumers to choose the product they want from the firm with the lowest price.2 If a company values its product above the natural price, consumers inevitably buy the product from a different company with a comparable product but lower price. If valued too low, the company will lose money.
The only competition that they have is they international competition such as trade with other countries; in the US we have a free market with unlimited
Monopolies in the 1900’s had immense powers in the market, and were able to have complete control because they had such power. A monopoly is the “exclusive control of commodity, market or means of production” where the “power is concentrated in the hands of a select few” (Beattie). While monopolies do get jobs done and inquire a large amount of money, their success it at the expense of the people and the power they have obtained is abused. They started off liked by small businesses because it helped with shipping costs, but eventually monopolies became too powerful. They are more hurtful to the public than helpful, and the benefits they gain from being a monopoly hurts the public, making them a collective dilemma.
However it doesn’t have a large impact on the food industry as such as consumers need to purchase food in order to survive. Although they may decrease quantity of foods they choose to buy, they are still willing to purchase basic foods that will sustain their health. Consumers are more likely during an economic downfall to spend their money on foods they require rather than want. The company as a result obtains an advantage from its competitors as they produce long lasting food options, which allows consumer’s to save during tough times. This highlights an opportunity for the company as they produce healthier and simple food varieties which many customers desire.
This means that the creameries are making a huge profit off of the dairy farmers, allowing them to make and sell milk along with milk products without having to be near a cow. With this method, the creameries did not have to worry about transportation costs, which would normally be an obstacle towards the dairymen. With their takeover of the milk industry, it will discourage the dairymen from creating milk since they will soon realize that it is not a profitable business. Their fall in the industry would be very detrimental to the health of America because many Americans rely on the milk to nurture their babies with proteins and fats. Some milkmen decided that they needed to change their situation by changing the root cause of their problems, the transportation
Statistics show that today there are over 1.7 billion members of the “consumer class”- half of them being in the developing world (2011, the World Watch Institute). Being part of the consumer class myself, I believe it is crucial to dispense a great deal of money on goods and services to improve the economy here in Canada. Does this mean I’m considered to be a consumer as a result of my views on world consumption? Yes, I fit into the category of a consumer due to the fact that I’m part of the endless cycle of supply and demand. From the moment I leave my house and walk the two minutes to the bus stop I’m already thinking about what I’m going to buy.
Native advertising doesn’t have very long history, but ever since it’s occurrence, its transparency is a controversial topic. It is walking on a fine line between reader’s trust and revenue streams. Native ads are deceiving the audience and making them believe that an ad is in fact editorial content. Due to those reasons in 2015 FTW set guidelines for publishers and advertisers to follow. Among those recommendations there is the Enforcement Policy Statement on Deceptively Formatted Advertisements which states that an ad is considered deceptive: "if it materially misleads consumers about the ad's commercial nature, including through any implied or express representation that it comes from a party other than the sponsoring advertiser."
The type of market my paper is concentrating on is known as a monopolistic competition market. The first characteristic that differentiate a monopolistic competition market from the other 3 markets is that in a monopolistic competition, there are many sellers which would lead to competition between the firms to sell their products. The second characteristic is that monopolistic firms are relatively small, which can result in either new firms to enter the industry or firms that are existing to exit the market. The third characteristic is that the firms in the monopolistic market sell products that are similar but are slightly different compared to other firms in the same market. The last characteristic is that the firms in a monopolistic market
Question 1 from chapter 5 “Do monopolies tend always to raise price and lower output?” Monopoly – man made restriction, where one firm or few control the market and determine the price and output for the product. Monopolies don’t always reduce output and skyrocket prices. For example in order to save the market when other firms try to join it, monopolies may do 180 and decrease the prices and increase output.
When there is a large number of sellers and a large number of buyers in a market, that market is regarded as a perfectly competitive market or industry. In a perfectly competitive market, a single firm cannot dictate the pace and the selling price (Khan Academy, n.d.). In other words, one firm cannot set the prices and the competitors are obligated to market prices. What is fascinating about a perfectly competitive industry is that the barriers that prevent new firms from entering the industry are flexible; that means there are minor barriers of entry as well as little or no barriers to exit the industry (Rittenberg & Tregarthen, 2009). Additionally, buyers and sellers have all the necessary information to make a decision to buy or sell a product.
The oligopoly market is set up in a way so that competitors can survive because each is unique and there are so few competitors that they are virtually indispensable even if some ethics atrocity
Market failure: It means that the market can not be efficient allocation of goods and services. Market failure can be seen as someone who wants to pursue personal interests leads to this result. “It describes any situation where the individual incentives for rational behavior do not lead to rational outcomes for the group. Put another way, each individual makes the correct decision for him/herself, but those prove to be the steady state disequilibrium in which the quantity supplied does not equal the quantity demanded.”