...This article talks of rice gouging as a pricing strategy followed by US companies vis-a-vis Australian consumers. We start with the concept of the strategy and the conditions required for its effectiveness. Next it is applied on the current situation that is the focus of the article. Lastly we try and assess the benefits and costs of this strategy. Price gouging is a form of price discrimination, where the producer/seller is able to discriminate between different consumers on the basis of his selling power or some feature of the consumer itself. Price gouging is negative in its implication as it involves charging higher prices from consumers in times of emergency, as the consumer has no choice. It is even treated as illegal in some economies. For example, if there is a hurricane and plywood manufacturers charge a higher price from consumers wishing to rebuild their homes, it is price gouging. This is because there is no change in the good provided or the cost of manufacturing that good. Producers are simply using the consumers’ emergency demand for plywood to boost profits for themselves. Another example is the rise in essential items prices when there is a curfew in riot affected areas. For the producer this makes sense as demand becomes inelastic in times of emergencies and he can charge a higher price and increase his profits. “Everyone engaged in a business who…engages in a policy of selling products in any area of the country at prices lower than those exacted by him elsewhere...
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...stress and financial strain upon those affected, and gouging the prices on basic necessities like food, water, and clothing leave normal people struggling to survive in situations where they remain vulnerable and in need. However, could these price gouging laws potentially keep people from obtaining the things that they cannot live without? Deciding whether or not to gouge prices should depend upon the company and the individual, not the law. At...
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...have been maximin rule – decisions made that identifies the worst outcome for each decision and choosing the decision with the maximum worst payoff (Thomas & Maurice, 2013, p. 647). 2. “A portfolio manager needs to pick winners—assets or securities with high expected returns and low risk.” What is wrong with this statement? This statement should read “A portfolio manager should choose a winning portfolio that matches the level of risk and provides the expected return of the investor.” A diversified portfolio carries a lower risk than individual stocks and should be the matrix for a successful investment, investing in securities with high expected returns involves a high level of risk. 3. Do you favor anti-gouging laws as a means of protecting consumers from high prices following natural disasters, such as Hurricane Katrina in New...
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...in the news for raising the price of prescription drugs. The price of Daraprim, a drug to treat toxoplasmosis, was increased by over five thousand percent. The increase has sparked people from both the AIDS and cancer organizations to reach out and attack the ethics of Chief Executive Officer, Martin Shkreli through social media. The increase in price may prevent hospitals from having treatment available for patients who need it. The practice of price gouging prescription drugs has now become an important political topic many candidates running for President of the United States in 2016 will be talking about. Significance of a Solution Recognizing that developing, manufacturing, and marketing pharmaceuticals is a very profitable business, the case of Turing Pharmaceutical’s purchase and marketing of the drug Daraprim spotlights a potentially serious issue with the way some companies “repackage” existing drugs to create higher profit margins. Daraprim (Pyrimethamine) was originally approved January 23, 1953 for the treatment of toxoplasmosis, an infection caused by a very common parasite (U.S. Food and Drug Administration, n.d.). Because most people never exhibit symptoms of this disease, sales of this drug were very small; and, no generic drug company ever bothered to duplicate the formula (Mayo Clinic, 2015). Seizing the opportunity to “corner the market” on this drug, Turing Pharmaceuticals purchased the rights and immediately raised the price from $13.50 per tablet to...
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...deal with. However consensus shows that this natural disaster won't have a dramatic effect on the US economy growth even though major cities such as Houston has been brutally flooded by Harvey. According to AccuWeather Hurricane Harvey damages is set to about $160 billion dollars, which would set it as the most expensive natural disaster to ever occur in US history. Other estimates seem to cost much less, but rising, according Bloomberg, Harvey is set to cost around $75 billion dollars in economic losses. The damages rose up $33 billion dollars the previous day. Gasoline prices have skyrocketed from the Hurricane. For example, AAA reported that the...
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...GABAA β3 receptors is theorized to lead to immobility, respiratory depression and hypnosis while GABAA β2 induction leads to hypnosis, sedation, hypothermia and Cardiac Depression. Along with its fast onset of action Propofol‘s pharmaceutical effects are quickly terminated if the i.v is stopped. The Quick Termination of therapeutic effects is due to decreased blood plasma concentration caused by redistribution of propofol from the CNS to other tissues and high metabolic clearance of the molecule. This leads to rapid recovery from sedation and quicker mobilization of patients. The Metabolism of Propofol by phase I and II hepatic enzymes produces an inactive form for hepatic clearance. Deactivated propofol molecules are mainly eliminated through kidney excretion into nephron tubules. The pharmacokinetics of propofol is not affected by gender or chronic hepatic cirrhosis, but it is affected by age and weight. With increasing Age, the dose needed to achieve anaesthetic effects decreases due to lower initial volume distribution and decreased clearance rate. These two variables are also affected by weight as it was observed that patients who were obese had significantly higher volume distribution and clearance rate. Toxicology Some side effects of propofol-induced anaesthesia are hypotension, cardiovascular depression and apnea along with other symptoms like nausea, and pain, most of these symptoms can be reversed by discontinuing the infusion. Propofol should not be used with drugs...
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...become an addict when trying out a drug. Most people already know that pain medication is prescribed and available easy and too much and in turn this is creating addicts. In the year of 2010 pharmacies dispensed something like 42 tons of hydrocodone and 69 tons of oxycodone. That’s enough drugs to give each human being in the United States of America 24 Vicodins and 40 Percocet’s. Prescription drugs are exceeding all drugs in levels of abuse. The rates are staggering with deadly results all across the nation DRUGS The drug problem is not an enemy that can be easily vanquished. A side effect is usually regarded as an undesirable secondary effect which occurs in addition to the desired therapeutic effect of a drug or medication. Side effects may vary for each individual depending on the disease state...
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...This essay makes me feel very curious about the nation’s decisions on allowing companies to control the price of pills. First of all, I believe that medicine should be either covered a persons’ insurance or shouldn’t as expensive as it is right now. “...By buying up the rights to older medicines for rare conditions and price-gouging people dependent on them.” This quote from the text The $750 Pill just proves that companies’ ability to change the value of a pill that people are dependent is absolutely absurd and that the government needs to set its own market prices. This quote also proves that Free Enterprise doesn’t always work and can sometimes cause rebellions and problems for the nation. Another quote that really got to me was, “…Sen....
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...it comes at a cost. Most of Uber’s prices are slightly cheaper than a street-hailed cab. But when demand spikes, the surge prices kick in: rates during the busiest times, such as New Year’s Eve, can be seven times normal levels, and minimum fares of up to $175 apply. During periods of excessive demand or scarce supply, when there are far more riders than drivers, Uber increases its normal fares with a multiplier, whose value depends on scarcity of available drivers. This so-called surge pricing uses microeconomics to calculate a market price for riders and drivers alike. The goal of surge pricing is to find the “equilibrium price” at which driver supply matches rider demand and riders’ wait time is minimized. Studies show that surge pricing achieves what it was designed to do: it brings more drivers online, and it allocates available rides to those who value them more. There is some evidence Uber’s surge pricing is improving taxi markets. The firm says drivers are sensitive to price, so that the temptation to earn more is getting more Uber drivers onto the roads at antisocial hours. In San Francisco, the number of private cars for hire has shot up, Uber says. This suggests surge pricing has encouraged the number of taxis to vary with demand, with the market getting bigger during peak hours. However, surge pricing has a major image problem. Hardly anyone has a good thing to say about it, and far too many people equate it with price gouging. This perception is a huge headache...
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...anti-trust laws set forth by the government itself. This deal is not in the public interest and federal regulators should scrutinize this deal and consider the effect it will have on smaller telecommunication businesses, consumers, and employees. Time Warner owns popular media companies such as CNN, HBO, and Warner Bros. Studios. AT&T is a major provider of telephone, internet and cable services across the nation. Both of these companies are incredibly large and prosperous on their own. Together, they would make the few number of companies that dominate the telecommunications market even smaller. This could have a negative effect on the free-market economy if they use this power to monopolize the market. This is exactly what Anti-trust laws were designed to prevent. The Clayton Act, an...
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...EpiPen is an injection containing epinephrine, this chemical narrows the blood vessel and open airways in the lungs. The effects of this injection can reverse severe low blood pressure, wheezing, hives, severe skin itching, and many different symptoms of an allergic reaction. They also use epinephrine to treat exercise induced anaphylaxis. Mylan offers the first authorized generic for EpiPen Auto injector at half of the wholesale acquisition cost . But as of 2016 , Mylan's EpiPen became the center of attention for scrutiny . Their prices increased by nearly 500 percent over the past seven years. American consumers are definitely not strangers to increased prices on drugs , but based on a few steep price hikes by the Mylan company and their decision to raise the price on EpiPen it caused an outrage. Mylan was at the center of criticism over rising drug prices. EpiPen is basically used by several parents of young children that suffer from food...
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...is the equilibrium Price and Quantity in the market? This is where the quantity demanded and the quantity supplied are equal. The corresponding price is the equilibrium price and the quantity is the equilibrium quantity. *Let us take the first line of data from the Spreadsheet as an example: Price- $200 Quantity Demanded- 1000 Quantity Supplied- 2200 Here there is an excess supply amount, so there are more computers than that are actually wanted. At this point, the sellers would recognize there are fewer buyers for their product at the current set price. Now they would attempt attracting buyers for the excess supply available by offering these goods at a lower price. By doing so, according to the law of demand, buyers will now purchase more of the computers and the supply overage will decrease until it eventually disappears. Now the market will reach the intersection point in which supply is equal to demand. *Now we can look at a different scenario in which the demand of computers are higher than the supply. Looking at the last line of data from the Spreadsheet: Price- $25 Quantity Demanded- 2750 Quantity Supplied-1150 This would display a price that is below the intersection point. Because there is such a high demand for the product, the consumer would be willing to pay more to obtain it. As the market price increases, the demand will decrease and will eventually cease at the intersection of the two curves, thus reaching Market equilibrium price. 3. Now suppose...
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...by ways of open and honest communication. Media coverage has made public corporate scandals in the last few years, creating awareness of unethical practices. Issues with made up financial reports, product quality, poor customer service, out of court settlements without admission of guilt, has created skepticism amongst consumers, thus affecting profit for the organization and the overall socio-economic stability. Deceptive practices are noticed. An example of a common practice among the retail industry is price gouging. Human beings are creatures of habit; consumers like to frequent the same businesses for their own personal reasons. They become familiar with the prices and when there is a markup and then a sale for the original price before the markup, it gets noticed. It is a sure way to lose credibility and customer’s loyalty. Consumers do not like to be deceived. An organization that engages in unethical practices affects everyone, creating a cascading effect. Once it becomes public employees morale goes down, they become uncertain about their future with the...
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...Everyone agrees that business managers must understand finance and marketing. But is it necessary for them to study ethics? Managers who answer in the negative generally base their thinking on one of three rationales. They may simply say that they have no reason to be ethical. They see why they should make a profit, and most agree they should do so legally. But why should they be concerned about ethics, as long as they are making money and staying out of jail? Other managers recognize that they should be ethical but identify their ethical duty with making a legal profit for the firm. They see no need to be ethical in any further sense, and therefore no need for any background beyond business and law. A third group of managers grant that ethical duty goes further than what is required by law. But they still insist that there is no point in studying ethics. Character is formed in childhood, not while reading a college text or sitting in class. These arguments are confused and mistaken on several levels. To see why, it is best to start with the question raised by the first one: why should business people be ethical? Why Should One Be Ethical? There is already something odd about this question. It is like asking, “Why are bachelors unmarried?” They are unmarried by definition. If they were married, they would not be bachelors. It is the same with ethics. To say that one should do something is another way of saying it is ethical. If it is not ethical, then one should...
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...The Effects of a Hurricane on the Principles of Supply and Demand Econ 365 Jacob Owen The principles of supply and demand state that supply is the availability of a good or service desired by a consumer. Demand is a measure of the public’s desire for that good of service. As a rule of thumb, if something is very popular, or very necessary, it generally will be in high demand. The demand for a specific good or service can literally change overnight. Case in point when a hurricane enters the Gulf of Mexico, certain products become in high demand especially along the United States Gulf coast. Sudden increases in demand can have both positive and negative results for the producer as well as the consumer. Some of the products that will suddenly go into high demand are batteries, flashlights, gasoline, gas cans, canned food etc. With this sudden increase in demand, producers will likely order and stock more of these items than they normally would. This sudden change in demand makes the usual supply decrease. This results in the suppliers having to increase their production numbers. With a sudden increase in demand and decrease in supply this sometimes leads producers to increase their prices as a result. While the price increase is sometimes necessary to handle the sudden change in demand, some produces engage in “price gouging,” that is artificially inflating prices to take advantage of the increased demand which is highly illegal. Sometimes, when a hurricane...
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