Food Producers: Ignorance or Market Failure? - Essay Sample

Introduction

Food producing companies may be producing products that are affecting our health. This may be due to ignorance or wrong and inadequate information that consumers get. However, there is also information failure in the market where by consumers ignore the warning illustrated on a certain product and they continue using it. Cigarettes have a warning written on its cover that warns consumers on it side effects like causing cancers but people do not seems to care about it thus end up abusing it only to suffer later. There is also imperfect information which may increase the consumers vulnerability it may be caused many factors like ,information may be very hard for the consumers to understand thus making it complicated for the consumers to implement and apply thus it may led to more harm if the consumer does not seek the right guidance . The other cause is addiction this is where by some drugs maybe very addictive thus once one gets into them it is very hard to stop like the cigarette smokers, they find it hard to stop smoking as it is very addictive. The other cause is lack of awareness it caused to lack of understanding in a certain area thus one may end up making the wrong decision. There is also misleading information this maybe caused due to the persuasive advertisement thus making a product look more admirable than it should be and it may end up overselling. However, despite this for market to work there must be asymmetric information. Asymmetric information it is a point whereby the consumer and the manufacturer have the same level of knowledge of a certain product the benefits and its side effects. It occurs when two people know more than each other this make the business more difficult to be conducted. Despite all these the government has intervened to the information gap it has achieved this by making sure that products are correctly labeled like the cigarette it is clearly labelled with a warning so that it may reduce the rate of smoking. It has also improved nutrition information in order to fight obsesity, there is also consumers protection law and finally there is information campaigning in order to fight smoking and drug abuse. Though this measures the government have helped to reduce the rate of consumers vulnerability in the market thus creating more awareness and fighting for their rights .However there are some companies who are very immoral and they end imitating some product thus creating a greater loose to consumer as they spend more by buying the incorrect product. These may lead to high lose and hinder the rate of innovation and invention. Imitation may affect both the consumer and the producer in one way or another. If a consumer happens to buy a product from a certain producer and he realizes that the product was not of the quality he expected to be he may decide to change from that company thus changing his taste and shifting to another producer. However, innovation is necessary for social welfare, innovation is a key factor as it helps to increase the quality of a product in the market. Innovation comes from industries that might be experiencing little competition in the market. There are some claims between the relationship between innovation and the level of competition which seem to be more complicated and complex to understand. One side views innovation to be stronger in a areas where the market is large as there is a lot of resources to pay for it and the possibility of reaping from it is high .The other side believes that innovation may very competitive in small firms in it environments as they have more to gain from it innovation and less loose and thus they may face a lot of pressure in order to thrive in their business as innovation make help a business to succeed dues to it uniqueness in innovation.

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In between there is a theory that equalizes levels the of market competitions that is a curve that explains the relationship between innovation and concentration look like U invented(Hall&Scherer2006,p,20).Imitation may cause a lot of mistrust and fear among the consumers as they are not sure whether they are purchasing the correct product or not to the increasement of poor quality product in the market .Imitation may also led to decline of certain producers and loose of customers to buy the product. However, innovation should be highly appreciated as it may create a huge source of income if a certain a good innovation is made in the market. Innovation may lead to a company to grow and become big companies however when a company becomes, they tend to evade taxation thus they create a lot of income without following the correct producer and also by not following the law of a country. Due to this habit there are some measures which should be implemented in order to deal with this vice. It may help to curb consumers vulnerability and also to economy which is also highly affected. With the advancement of technology everything has become digital and also the method of taxation has also become digital. This method of digital taxation has helped a lot as it now very difficult to evade tax. Some companies evade tax by finding ways to shift U.S. profits to foreign countries with lower tax late this process is known as tax sheltering, there is also another way of which uses accelerated depreciation.

There is also another form of taxes evasion called the tax loophole it the provision of tax code that allows taxpayers to decrease tax their tax liability .To fight tax eviction which may cause to decline of some companies and also increase the level of consumers vulnerability there are some ways which have been innovated to help fight against tax evection one is the false invoicing it is a feature of technology solution, the one is the best practices and the economy and sharing economy finally there is electronic sales suppression and counter technology in these all information collected must be kept separately from the cash register and in a well secured place to avoid it being tempered with and also to prefect it from hackers .To implement these some action may also be taken like the type and degree of tools needed in order to implement data recording solution which may depend on the domestic legal framework.

False invoicing has a solutions which are ,requiring electronic invoice .Business should have records of all the transactions they have made with the customers and the should produce an invoice to the customer in after purchasing a product, the invoice should be either inform of paper or electronic .False invoice is more conducive as it may contain many feature, these features are useful by providing the collect information and accurate one thus reducing the level of invation of tax, as it may detect false information. Due to high level of tax eviction it has made both disadvantage and advantage at the same time. This is achieved by the company that is a evading tax may be seems to be more successful than those that pay taxes regularly. Some companies which have high sales in the market, seems to be causing a downfall to other minor companies, as they pay the same amount of tax.

In order to fight and protect consumers from vulnerability the government should standard firm and deal with any form of corruption any angles. It should also educate the customers on a certain product; it is also the responsibility of the consumers to be attentive and curious when making any purchase so that they avoid being mistreated companies should also follow the law and pay the tax as per the agreement made.

References

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