The current extended interpretation of the Commerce Clause Research Paper

The current extended interpretation of the Commerce Clause - Research Paper Example There is little doubt that the conventional and accepted common meaning of commerce both in common discourse as well as in legal language, was mercantile trade and the additionally associated activities (Natelson & Kopel, 2011). There are at least four possible interpretations which have been proposed in interpretation of the Commercial Clause (Scheb & Stephens, 2007, pg. 100). First it has been advocated that the clause bestows upon the Congress the absolute power to control commerce. Under this construal, states are deprived off power to check interstate commerce. Secondly, it has been interprated that theclause gives Congress and the states contemporaneous powers to regulate commerce. Under this interpretation, state regulation of commerce is unenforceable only in cases where it is pre-empted by federal laws (Exploring Constitutional Conflicts, 2011). Third, the Commerce Clause has been interpreted to imply that both the congress and the states each have their own mutually exclusive zones of regulatory power. Under this construal, it becomes the responsibility of the judicial system to determine whether one sovereign has invaded the exclusive regulatory zone of the other. The last interpretation that has been advanced is that the clause by its own force dissociates states the power to regulate commerce in certain ways, but both the Congress and States retain coexisting power to control commerce in many other respects. This forth interpretation, is a complicated and convoluted hybrid of two others, and it is the approach employed by the courts in their decision while interpreting the commerce clause. According to Marshall (Kommers, Finn, & Jacobsohn, 2004, pg. 301), as long as any aspect of commerce implicated or involved more than one state, such as transportation or the exchange of commodities across state lines, congress may regulate it. The power to regulate, however, is equally broad. He added, this power, like all others

Customer Service at Richer Sounds Essay Example for Free

Customer Service at Richer Sounds Essay Richer Sounds believe that the most important measure of the success would be to give all their customers a great service and satisfaction. This is even important than making the profit margins high and gaining a lot of profit this is because Any organisation can increase their profits by increasing prices of goods, buying cheaper and low quality goods, cutting down on employees and many more but doing this Richer Sounds believe that there wont be good customer service due to less employees, customers wont purchase any expensive products which is not of good quality and through this they will keep losing customers The company believes once a customer purchases a product and thinks it was at low price and also sees it is off good quality with an excellent customer service given to him the he/she will always tend to come back to purchase more goods, in-fact the customer may also tell some of its friends and families about the prices that Richer Sounds have and like this the company will benefit in getting new and new customers all the time. How Richer Sounds strive to achieve superb customer service They think the following are important: Management commitment this means every director and every manager states the customer service as most essential in the business. This also means spending money to give excellent services Recruiting and training right people Colleagues are looked at their personalities and attitude while there are been giving an interview. All colleagues that have been given the job have a 3 day induction course which even concentrates in training the new colleagues how to give an excellent customer service Motivated colleagues if all colleagues are treated well and valued they will give good service to customers. For this reason the colleague support function is so critical. Measuring the results The best way to find the right results are to ask customer themselves therefore Richer Sounds does this through it sales questionnaires. Richer Sounds also have a mystery shopper who looks how well the colleagues manage their customers and how greatly they give customer service. The company also has telephone call system, which is been recorded, and through this they check how well store colleagues answer to customer problems. A customer friendly environment this include the ease of walking around the store, the layout of the store and how well are the products displayed and also how well each customer will be able to search for his/her product The company insist their colleagues to wear smart clear clothes with clear name badges and to greet all their customers. Responding to customer needs Training in customer service All new colleagues have to attend the three day induction course before they are allowed to serve customers. While doing this course they are also taught on the aspects of customer service, which includes: How to approach a customer within the stores Richer Sounds has several policies on approaching a customer such as: Not to approach a customer as soon as they have entered the store for any help, Once a customer enters they should greet them by saying hello and most strict rule is to not approach anyone from behind because it may scare them and only approach from the side or from the front The appearance of the colleagues all colleagues working in the sores have to were the Richer Sounds uniform with a name badge on it How to cope on busy days All tills must be used to serve customers and try to serve quite faster. When the queues are very long colleagues should offer customers standing and not standing in the queues a cup of tea or coffee. Usually no customers like to wait in queues especially when the store I very crowded. How to ask questions to customers colleagues should ask questions relating on the type of product they are looking for and not to encourage customers to buy items they dont wont because richer sounds believe this is the worse thing to do. How to handle payments the company uses all types of credit cards or any type of purchase whether the item is 99p or even if the item is i 99. 99. This is because there are times when people wont to pay later for the item they need because you get a time period to pay the amount and there are times when customers may have forgot their money at home but want to purchase the item so they can use the credit card. Due to this reason no one may leave the store without anything just because they forgot their money. How to cope with technical questions Health and safety each colleague should know how to take actions in emergency to do this they may need this training How to deal customers who have disabilities All colleagues should have respect for customers who have disabilities and should help them in all ways for which product they are looking for. All colleagues should be truthful in what they sell and how much they take because if there is a blind person needing a tape player the colleagues shouldnt charge more money to what it should be. How Richer Sounds Identify Customer needs and Expectation There are three main ways how richer sounds identify customer needs and expectation, which are: The till receipt questionnaires these are most important questionnaires because everyone who purchases a product will receive and if they taught they did get treated well at the store then he/she may fill the questionnaires. These questionnaires are also seen everytime the customers will see the receipt and so next time when they may come back to the store to purchase another item then they could also bring the filled questionnaires with them.

Analysis of the Chocolate Industry in India

Analysis of the Chocolate Industry in India Project Objective This project aims at understanding the overall Chocolate Industry in India, the product portfolios of different players in the market, various factors affecting the growth and success of chocolate industry in India, the challenges and opportunities which the market offers and the changing trends in the Indian Chocolate Industry. The project also covers a brief study of Cadburys India with reference to above points. An Overview of Chocolate Industry in India The chocolate industry in India as it stands today is dominated by two companies, both multinationals. The market leader is Cadbury with a lions share of 70 percent. The companys brands (Five Star, Gems, Eclairs, Perk, Dairy Milk) are leaders their segments. Till the early 90s, Cadbury had a market share of over 80 percent, but its party was spoiled when Nestle appeared on the scene. The latter has introduced its international brands in the country (Kit Kat, Lions), and now commands approximately 15 percent market share. The Gujarat Co-operative Milk Marketing Federation (GCMMF) and Central Arecanut and Cocoa Manufactures and Processors Co-operative (CAMPCO) are the other companies operating in this segment. Competition in the segment will get keener as overseas chocolate giants Hersheys and Mars consolidate to grab a bite of the Indian chocolate pie. Per Capita Chocolate Consumption (in lb) of first 15 countries of the world Rank Countries Per Capita Consumption (in lb) Switzerland 22.36 Austria 20.13 Ireland 19.47 Germany 18.04 Norway 17.93 Denmark 17.66 United Kingdom 17.49 Belgium 13.16 Australia 12.99 Sweden 12.90 United States 11.64 France 11.38 Netherlands 10.56 Finland 10.45 Italy 6.13 INDIA, stands nowhere even near to these countries when compared in terms of Per Capita Chocolate Consumption. The Indian chocolate industry is extremely fragmented with a range of products catering to a variety of consumers. We have the bars/slabs, jellies, lollipops, toffees and sugar candies. Given Indias mammoth population, it comes as a surprise that per capita chocolate consumption in the country is dismally low a mere 20 gms per Indian. Compare this to over 7 kgs in most developed nations. However, Indians swallowed 22,000 tonnes of chocolate last year and consumption is growing at 10-12 percent annually. The market size of chocolates was estimated to be around 16,000 tonnes, valued around Rs. 4.16 billion in 1998. Volume growth which was over 20% pa in the 3 years preceding 1998, slowed down thereafter. Both chocolate and sugar confectioneries have abysmally low penetration levels, in fact, even lower than biscuits, which reach 56 per cent of the households. Market growth in the chocolate segment has hovered between 10 to 20%. In the last five years, the category has grown by 14-15% on an average and will expect it to continue growing at a similar rate in the next five years. The market presently has close to 60mn consumers and they are mainly located in the urban areas. Growth will mainly come through an increase in penetration as income levels improve. However, almost all of this consumption is in the cities, and rural India is nearly chocolate-free. But the fact is that three quarters of Indians live in Rural Areas. Average summertime temperatures reach 43 degrees Celsius in India. Chocolate melts at body temperature of 36 degrees. Per capita consumption of chocolates in India is minuscule at 20gms in India as compared to around 5-8 kgs and 8-10 kgs respectively in most European countries. Awareness about chocolates is very high in urban areas at over 95%. Growth of other lifestyle foods such as malted beverages and milk food have actually declined by 3.7 per cent and 11.7 per cent, however the CHOCOLATES continue to grow at the rate of 12.6%. Low priced unit packs, increased distribution reach and new product launches can be said to have fuelled this growth. The launch of lower-priced, smaller bars of chocolate in the last two years and positioning of chocolate as a substitute to traditional sweets during festivals, have boosted consumption. This is also because chocolate, which was considered to be an elitist food, has caught the fancy of buyers looking for a lifestyle item at affordable cost. Till recently, chocolate consumption had been restricted by low purchasing power in the market. Chocolates and other cocoa-based snack foods were looked upon as food suitable only for the well-off. After economic liberalization in 1991, major changes have occurred in food habits, partly on account of rise in gross domestic product (GDP) growth and higher purchasing power in the hands of the middle-class representing a third of the total population. Availability of chocolate products has also exploded. A study had projected that sales of the Indian chocolate industry would rise from $125/$130 million in 1998 to $175/$180 million by the year 2000 and to $450 million by the year 2005 which ACTUALLY happened irrespective of various negative factors. Per capita chocolate consumption continues to be low at about 200g per person, being mainly consumed in urban areas. In the middle and higher income groups, 70 per cent of children, 43 per cent of young adults and 16 per cent of adults consume chocolate. AC Nielsen ORG Marg report estimates the Indian Chocolate Industry worth at Rs 2,000-crore (Rs 20 billion) Types of Chocolates Depending on what is added to (or removed from) the chocolate liquor, different flavors and varieties of chocolate are produced. Each has a different chemical make-up, the differences are not solely in the taste. 1. Unsweetened or Baking chocolate is simply cooled, hardened chocolate liquor. It is used primarily as an ingredient in recipes, or as a garnish. 2. Semi-sweet chocolate is also used primarily in recipes. It has extra cocoa butter and sugar added. Sweet cooking chocolate is basically the same, with more sugar for taste. 3. Milk chocolate is chocolate liquor with extra cocoa butter, sugar, milk and vanilla added. This is the most popular form for chocolate. It is primarily an eating chocolate. Cocoa is chocolate liquor with much of the cocoa butter removed, creating a fine powder. It can pick up moisture and odors from other products, so you should keep cocoa in a cool, dry place, tightly covered. There are several kinds of cocoa Low-fat cocoa has the most fat removed. It typically has less than ten percent cocoa butter remaining. Medium-fat cocoa has anywhere from ten to twenty-two percent cocoa butter in it. Drinking or Breakfast cocoa has over twenty-two percent left in it. This is the cocoa used in chocolate milk powders like Nestles Quik. Dutch process cocoa is cocoa which has been specially processed to neutralize the natural acids in the chocolate. It is slightly darker and has a much different taste than regular cocoa. Decorators chocolate or confectioners chocolate isnt really chocolate at all, but a sort of chocolate flavored candy used for things such as covering strawberries. It was created to melt easily and harden quickly, but it isnt chocolate. Categories of Chocolates Commercial Chocolates are available in the following forms: Bars or Moulded Chocolates Counts Panned Chocolates (Gems) Éclairs Assorted Chocolates Bars or moulded chocolates (like Dairy Milk, Truffle, Amul Milk Chocolate, Nestle Premium, and Nestle Milky Bar) comprise the largest segment, accounting for 37% of the total chocolate market in volume terms. Wafer chocolates such as Kit-Kat and Perk also belong to this segment. Panned chocolates accounts for 10% of the total chocolate market. Wafer chocolates such as Kit-Kat and Perk also belong to this segment. .. Form of Consumption Pure Chocolates Toffees Cakes Pastries Malted Beverages Wafer Biscuits Baked Biscuits Chocolate Desserts Chocolate Manufacturing Process Workers cut the fruit of the cacao tree, or pods open and scoop out the beans. These beans are allowed to ferment and then dry. Then they are cleaned, roasted and hulled. Once the shells have been removed they are called nibs. Nibs are blended much like coffee beans, to produce different colors and flavors. Then they are ground up and the cocoa butter is released. The heat from the grinding process causes this mixture of cocoa butter and finely ground nibs to melt and form a freeflowing substance known as chocolate liquor. From there, different varieties of chocolate are produced. What is conching? Raw unprocessed chocolate is gritty, grainy and really not suitable for eating. Swiss chocolate manufacturer Rudolph Lindt discovered a process of rolling and kneading chocolate that gives it the smoother and richer quality that eating chocolate is known for today. The name conching comes from the shell-like shape of the rollers used. The longer chocolate is conched, the more luxurious it will feel on your tongue. Market Size (by value by volume) The Indian chocolate market is valued at Rs. 650 crores (i.e. Rs. 6.50 billion) a year. The Indian chocolate bazaar is estimated to be in the region of 22,000-24,000 tonnes per annum, and is valued in excess of US$ 80 million. Chocolate penetration in the country is a little over 4 percent, with Indias metros proving to be the big draw clocking penetration in excess of 15 percent. Next, comes the relatively smaller cities/towns where consumption lags at about 8 percent. Chocolates are a luxury in the rural segment, which explains the mere 2 percent penetration in villages. The market presently has close to 60mn consumers and they are mainly located in the urban areas. Major Players their Market Share The major players in the Indian Chocolate Industry are: Cadburys India Limited Nestle India The Gujarat Co-operative Milk Marketing Federation (GCMMF) AMUL Cocoa Manufactures and Processors Co-operative (CAMPCO) Cadburys India Limited A Study CADBURYS INTERNATIONAL Cadbury is a very old trusted name. It all started in Birmingham in England when John Cadbury started his family grocery shop with side business of cocoa and chocolate products in around 1824. His two sons, Richard and George, expanded their family business of cocoa and chocolate. Bournville, a town near Birmingham, was build by them as a part of expansion of their business. Cadbury family is also known for their contribution in social reforms and considered as liberals. This family was in the forefront of adult education movement in England. CADBURYS INDIA LIMITED Cadbury was originally incorporated as a wholly owned subsidiary of Cadbury Schweppes Overseas Ltd (CSOL) in 1948. The companys original name was Cadbury Fry (India) Ltd. In 1978, CSOL diluted its equity stake to 40% to comply with FERA guidelines. In 1982, the name was changed to Hindustan Cocoa Products. CSOLs shareholding was increased to 51% in Jan 83 through a preferential rights issue of Rs700mm. The current name was restored in Dec 89. In 2001, Cadbury Schweppes made an open offer to acquire the 49% public holding in the company. The parent holds over 90% of the equity capital after the first open offer. A second open offer has been made to buyback the balance shareholding, after which the company would operate as a 100% subsidiary of Cadbury Schweppes Plc Ever since the Cadbury is in India in 1947, Cadbury chocolates have ruled the hearts of Indians with their fabulous taste. The company today employs nearly 2000 people across India. Its one of the oldest and strongest players in the Indian confectionary industry with an estimated 68 per cent value share and 62 per cent volume share of the total chocolate market. It has exhibited continuously strong revenue growth of 34 per cent and net profit growth of 24 per cent throughout the 1990s. Cadbury is known for its exceptional capabilities in product innovation, distribution and marketing. With brands like Dairy Milk, Gems, 5 Star, Bournvita, Perk, Celebrations, Bytes, Chocki, Delite and Temptations, there is a Cadbury offering to suit all occasions and moods. Today, the company reaches millions of loyal customers through a distribution network of 5.5 lakhs outlets across the country and this number is increasing everyday. OBJECTIVES AND VALUES Our objective is to Grow shareholder valueover the long term Cadbury in every pocket Our marketing strategy is aimed at achieving this vision by growing the market, by appropriate pricing strategy that will create a mass market and to have offerings in every category to widen the market Our Managing For Value Process incorporates Setting stretched financial objectives. Adopting Value Based Management for major strategic and operational decisions and business systems. Creating an outstanding leadership capability within our management. Sharpening our company culture to reflect accountability, aggressiveness and adaptability. Aligning our management rewards structure with the interests of our shareowners. VISION Life Full Of Cadbury Cadbury is an organisation which impacts and interacts with the consumers. Cadbury is present in most happy occasions in the life of our consumer. Our brands excite our consumer. Cadbury is an expression of a consumers life. Cadbury Full Of Life Cadbury as a company is vibrant. Cadbury ia a fun and energising workplace. Cadbury is robust and alive. Business Cadbury dominates the Indian chocolate market with above 65 70 % market share. Besides, it has a 4% market share in the organized sugar confectionery market and a 15% market share in milk/ malted foods segment. Cadburys Indian operations are not just the largest in Asia but also the cheapest. In India, Cadbury has the largest market share anywhere in the world and has been the fastest growing FMCG Company in the last three years with a compound annual growth rate of 12.5 per cent. Plant locations Cadburys manufacturing operations started in Mumbai in 1946, which was subsequently transferred to Thane. In 1964, Induri Farm at Talegaon, near Pune was set up with a view to promote modern methods as well as improve milk yield. In 1981-82, a new chocolate manufacturing unit was set up at the same location in Talegaon. The company, way back in 1964, pioneered cocoa farming in India to reduce dependence on imported cocoa beans. The parent company provided cocoa seeds and clonal materials free of cost for the first 8 years of operations. Cocoa farming is done in Karnataka, Kerala and Tamil Nadu. In 1977, the company also took steps to promote higher production of milk by setting up a subsidiary Induri Farms Ltd near Pune. In 1989, the company set up a new plant at Malanpur, MP, to derive benefits available to the backward area. In 1995, Cadbury expanded Malanpur plant in a major way. The Malanpur plant has modernized facilities for Gems, Eclairs, Perk etc. Cadbury also operates third party operations at Phalton, Warana and Nashik in Maharashtra. These factories churn out close to 8,000 tonnes of chocolate annually. Cadburys Dairy Milk (CDM): Cadburys Dairy Milk is the flagship brand of Cadburys not only in India but world wide. CDM is the single largest selling unit in India. It has annual sales to the tune of Rs 200 crore. CDM not only accounts for 30 per cent of the total chocolate market in value, but commands nearly 26 per cent in volume terms and close to 30 per cent of Cadburys annual turnover. Moving from a predominantly adult positioning in the days of the legendary dancing girl ad, to the teens and the tweens, when the Cyrus Broacha ads hit the airwaves, CDM has made a long sweet journey. In spite of the new categories being explored by Cadbury, its star brand remains Cadbury Dairy Milk (CDM) which continues to corner almost 30 per cent of the chocolate market. Cadburys Temptation: Cadburys Temptation is premium chocolate brand aimed for high value consumption. Various variants available are Almond, Rum, Cashew Orange. Cadburys temptation is priced at Rs. 40 Cadburys Celebration Cadbury India launched its premium Celebrations range, which contains traditional Indian dry fruits wrapped in Dairy Milk chocolate. This gifting option combines the pleasure of giving away dry fruits which Indians traditionally consider a premium, healthy gift with chocolate. Cadbury now has 90 per cent market share in this profitable segment. PRODUCT REVAMPING INNOVATIONS Cadburys chocolate brands registered double-digit growth in 2002, touching an astounding 19 per cent in the second half of that calendar year. Getting the power brands right was the first priority, so genuine re-launches of the products were made. However, the growth rate was declining after that. The growth went down from 19 per cent in 1999 to 12 per cent in 2000 to single-digits, with seven per cent in 2001. If it staged a smart recovery to nearly 10 per cent in 2002, it was largely on the back of Chocki and the revamped power brands. PRODUCT INNOVATIONS: 5 STAR: Consumer feedback suggested that the old 5 Star was too chewy, and people complained of it sticking to their teeth. It was made softer and melted easily in the mouth introduced as 5 Star Crunchy PERK: Perk was made much lighter and the size of the bar increased to match Nestles Munch. Perk had been under fire from Nestles deadly duo of KitKat and Munch, but after the relaunch, its marketshare is two per cent more than KitKats. And, the five-year-old brand is now almost as big as the decades-old 5 Star in size, both in the region of Rs 50-55 crore. HEROES: Packaging innovation has played a vital role in revamping of various Cadburys brands. Heroes brand is simply a multi-pack with miniatures of all its most popular brands in a single outer case. NEW PRODUCT LAUNCHES Rich Dry Fruit Collection For Gifting Festive Season Cadbury Celebrations Rich Dry Fruit Collection a range of premium chocolate gift boxes. Available in attractive packs, the Collection caters to a premium gifting consumer and is an ideal festive gift. It is a unique combination of the best Cadbury chocolate and premium dry fruits and comes in four different formats each of which is a mix of select premium dry fruits enrobed in rich Cadbury Dairy Milk chocolate. Cadburys Creative Launch A new after dinner segment Cadbury Desserts for sweet moments after dinner Khaane Ke baad Kuch Meetha Ho Jaye. Rs. 20/- per packet of 44 gms Cadbury Dairy Milk (CDM) Desserts with rich indulgent crà ¨me center, in exotic traditional flavors of Tiramisu and Kalakand. CDM Desserts offer the perfect rounding off taste, after meal that adds special Meetha moments to the family. The rich tastes of CDM combined with the unique crà ¨me center in exotic flavors provide a special chocolate experience. CDM Desserts add delight to the after-meal moments, especially with the consumers whose current choice of sweets range from home made delicacies to fruits to meethai. PRICING After the roaring success of Nestles Munch and Chocostick, Cadburys empire struck back hard. The Rs 5 price point accounts for more than half of all chocolate sales. Nestle had seized the initiative at this price point, with its launch of Munch, now a roaring success (and the largest selling product at that price point). Today, Cadbury has four products at this price point: CDM, Perk, 5 star and Gems and the five-rupee CDM bar is its single largest-selling SKU. This is a potent price point in India, because the average purchasing power is abysmally low, is what industry analyst have to say. Nestle kicked off one of the biggest success the liquid chocolate category with its brand Chocostick priced at Rs.2 three months ahead of competition. Cadbury did react with Chocki, priced at Rs 2, expanding the concept of sachetisation to new frontiers. Chocki has been the single biggest growth driver for Cadbury as well as the entire chocolate category. The novelty of the format endeared itself to the existing customer. In less than one year, it constituted nearly 10 per cent of the total chocolate market, split equally between Cadbury and Nestle. Volume led growth strategy Cadbury has followed a well-planned strategy of fuelling volume growth by introducing smaller unit packs at lower price points. Simultaneously, the company seems to have astutely juggled with the larger pack sizes and raised prices to a degree higher than what appears at face. The strategy has driven volumes in the last two years and we expect the volume growth to continue in the next two years. PRICE WOES Chocki, selling at a potent price point of Rs 2, was ideal for smaller towns, especially since it did not need refrigeration. But Chocki started to cannibalise other higher-priced chocolates in larger markets. The students of Bombay Scottish (an upmarket school in Mumbai) are not supposed to eat Chocki, they should not have even heard of the product. Distribution Chocolate needs to be distributed directly, unlike other FMCG products like soaps and detergents, which can be sold through a wholesale network. 90% of chocolate products are sold directly to retailers. Distribution, in the case of chocolates, is a major deterrent to new entrants as the product has to be kept cool in summer and also has to be adapted to suit local tropical conditions. Cadburys distribution network used to encompasses 2100 distributors and 450,000 retailers. The company has a total consumer base of over 65 million. Besides use of IT to improve distribution logistics, Cadbury is also attempting to improve distribution quality. To address the issues of product stability, it has installed VISI coolers at several outlets. This helps in maintaining consumption in summer, when sales usually dip due to the fact that the heat affects product quality and thereby offtake. To avoid cannibalization of its higher priced products from lower priced ones, Cadbury is setting up two separate distribution channels one for CORE business other for MASS markets, with different stockists, wholesalers and retailers. One set will be dedicated to Cadburys high-end products and traditional chocolates. The other will cater to the mass market brands namely Chocki, Halls, Eclairs et al all products priced below Rs 3. But today, Cadburys distribution network reaches out to six lakh outlets each for its chocolate confectionery brands (i.e. total reaching12 lakh outlets). Promotion Typically it is said that chocolates are being eaten when everyone is happy. And this is something advertising has always portrayed. But it is found chocolates are eaten under diverse conditions and moods when people are anxious, when they are sad, when happy a whole range of emotions. Condensing these views thoughts, it can be said chocolate is a true soul mate. Someone who is with you through the ups and downs of life, helping you bounce back. And thats what Cadburys Dairy Milk (CDM) positioned itself as a special friend. % Share of various Brands Ad spending of Cadbury Here, the 6 Cadbury brands shown in the graph comprise 85% of the advertising pie, whereas, rest of the 9 brands advertised by Cadbury comprise 15% of the advertising. Cadbury Dairy Milk Chocolate is the most advertised brand (with 22%). RE-INVENTING CABDURY Kya Swad Hai Zindagi Mein redefined the way Indians looked at Cadbury Chocolates. (The commercial showed a beautiful young lady overcoming all obstacles on the cricket ground, crossing boundary, watchman, securities and embracing her lover who won the game by hitting a six). This theme introduced in around mid 90s bought instant growth to Cadburys Dairy Milk. The Ad campaign ran successful for about four years and immersed deeper inside hearts of Indians. In March 2002, Cadbury launched its next advertisement campaign for its flagship chocolate brand, Cadburys Dairy Milk (CDM). The campaign featured a television (TV) commercial that was significantly different from the companys earlier commercials for the brand. It featured Cyrus Broacha interviewing college students and asking why they liked to eat CDM. This was followed by college students singing their excuses for eating CDM. Just as the commercial seems all set to end with the students and Cyrus singing the famous CDM theme, Khane Walon Ko Khane Ka Bahaana Chaahiye (those who want to eat, will find excuses), a student comes up and questions Cyrus, The advertisement aimed at conveying the idea that no specific occasion is required for consuming CDM. This was a significant departure from CILs strategy of appealing to adults in India, who sought a rational justification for indulging in chocolate consumption. Cadbury roped in Preity Zinta for its PERK brand. Preity Zintas angelic dim ples laid the foundation for what would become the Indian teenagers favorite snack. After this campaign, PERKS sale surged Cadburys advertising has, over the past few years, aptly reflected Indias passion for chocolates. Cadbury And The Worm Controversy The discovery of worms in some samples of Cadburys Chocolate in early October 2003 created one of the biggest controversies in India against a Multi National reputed for being a benchmark of QUALITY. The controversy created an deep adverse impact on the company with their sales not only drastically dipping down, but at the same time allowing the competitors to establish their foothold and taking maximum advantage of Cadburys misfortune. The controversy, and the adverse publicity received in several countries, set back its plan of outsourcing model which would have resulted in significant revenue generation, several months back. The worms controversy came at the worst time.the next few months were the peak season of Diwali, Eid Christmas. Cadbury sells almost 1,000 tonnes of chocolates during Diwali. In that year, the sales during festival season dropped by 30 per cent. The company saw its value share melt from 73 per cent in October 2003 to 69.4 per cent in January 2004. In May, however, it inched up to 71 per cent. CDM sales volumes declined from 68 per cent in October 03 to 64 per cent in January 2004 Clearly, the worm controversy took a toll on Cadburys bottom-line. For the year ended December 2003, its net profit fell 37 per cent to Rs 45.6 crore (Rs 456 million) as compared with a 21 per cent increase in the previous year. However, Cadburys reiterated that all through the 55 years of leadership in India, that it has remained synonymous with chocolates and have remained committed to high quality and consumer satisfaction. CABDBURYS FIGHT-BACK Project Vishwas Steps to ensure quality regain the confidence Following the controversy over infestation in its chocolates, Cadbury India Ltd unveiled Project Vishwas, a plan involving distribution and retail channels to ensure the quality of its products. The companys team of quality control managers, along with around 300 sales staff, checked over 50,000 retail outlets in Maharashtra and replaced all questionable stocks with immediate effect. The Vishwas programme was intended to build awareness among retailers on storage requirements for chocolates, provide assistance in improving storage conditions and strengthen packaging of the companys range of products. Cadbury reduced the number of chocolates in its bulk packets to 22 bars from the present 60 bars. These helped stockists display and sell the products safely and hygienically 190,000 retailers in key states were covered under this awareness programme. The Big B FACTOR The big factor that has pushed up CDM sales is the Amitabh Bachchan campaign. It helped restore consumers faith in the quality of the product. In early January, Cadbury appointed Amitabh Bachchan as its brand ambassador for a period of two years. The company believed that the reputation he has built up over the last three decades complements their own, which was built over a period of 50 years. Yet, the entire credit of recovery could not be attributed to the brand mascot. Incisive action taken by the company also helped. Some of which were: Responded to consumers concern over the issue rapidly. Also, the communication campaign worked effectively in giving out the central message. The packaging was changed to include a sealed plastic wrapper inside the outside foil. Cadburys launched a new purity-sealed packaging for its flagship product, Cadbury Dairy Milk. The packaging is in response to foreign bodies, notably worms, being found in its products. Over the next few weeks Cadbury will work towards introducing either a heatsealed or a flow-pack packaging that offers a high level of resistance to infestation from improper storage. New advertising promotion campaigns were in place which accounted for an Ad spend of nearly Rs 40 crore (Rs 400 million) Cadbury invested nearly Rs 25 crore (Rs 250 million) this year on new machinery for the improved packaging. CADBURYS SINGING SWEETLY AGAIN All is well that ends well. And for Cadburys India, nothing can be sweeter than Regaining Back the Consumer Confidence. Thanks to quick action taken to recover the damage done by the worm controversy like Operaion Vishwas, adopting new packaging massive advertising with Mr. Amitabh Bachchan as their brand ambassador, Cadburys regained its market share. The survey conducted by the company says that consumers have long forgotten the controversy and are back to their merry chocolate-chomping ways. Sales were back to the precontroversy levels. Consumer confidence in the product was back and there was a steady progression in sales .The company posted a high double digit sales growth in that year end. The recovery began in May 2004 when Cadburys value share went up to 71 per cent. Hires AT Kearney to curb costs Cadbury India appointed management consultancy firm AT Kearney to draw up a strategy to control costs in several areas, including sourcing of raw materials and packaging. This was partly an outcome of the worms controversy more than a year ago. Among other things, it changed the wrappers for its Cadbury Dairy Milk brand and introduced better coolers. The consultancy firm will also look at the sourcing of direct and indirect materials like renegotiating with suppliers for longer term contracts and vendor management. Other costs (indirect expenses) like travel costs and hotels were also being studied. In other words, Cadbury is trying to reduce the cost per stock keeping unit (SKUs, or packs). The aim is to improve efficiencies. Earnings sensitivity factors Cocoa bean prices: Domestic as well as international prices of key raw material cocoa have significant impact on margins. Excise duties : Changes in excise levied on malt and chocolate influences end product prices and thereby volume growth as well as margins. Changes in

Artificial Intelligence Programming Assignment :: Essays Papers

Artificial Intelligence Programming Assignment Problem Statements Eight-Queens Puzzle Is it possible to place eight Queens on a chessboard, so that none of the Queens occupy the same row, column, or diagonal? Binary Search Depth-First & Breadth-First Search Newton’s Method Take a number whose square root is to be calculated, any positive number. Take a guess at the number’s square root. Calculate the square root by improving on the current guess as indicated: Next guess = (number/ current guess + current guess)/ 2 Repeat this process until the difference between the next guess and the current is within the accepted level of accuracy. The better your guess, the fewer the number of iterations needed to get the square root. A good first guess is typically half the number whose square root is to be calculated. The process is ten repeated until the desired accuracy is achieved. Newton-Raphson Method Determine a root of the equation f(x) = x^3-x^2-9x+9 = 0 using the Newton-Raphson method if the initial guess is x1 = 1.5. Gauss-Siedel Method Solve the following set of linear simultaneous equations using the Gauss-Seidel method: 10x1 + 2x2 + 3x3 = 11 X1 + 5x2 + 2x3 = 20 3x1 + 2x2 + 6x3 = -12 Theoretical Solutions Eight-Queens Puzzle 1. Pick a position for the Queen 2. If legal, go to next row. 3. If illegal, pick the next position. 4. If no legal position is found, back up to one row. If legal positions are found for all eight rows, the problem is solved. Binary Search †¢ Search the current node value to see if it equals the search value. †¢ If the search value is smaller than the current value, make the current node the left child node. †¢ Make the current node the right child node. Depth-First & Breadth-First Search Depth-First Search: †¢ Searches as far down the left side of the binary tree. †¢ When it encounters, NULL, the search switches to the bottom-most right child and resumes. Breadth-First Search: †¢ Remove a node from the queue. This becomes the current node. †¢ Place all child nodes of the current node onto the queue. Newton’s Method †¢ Get a positive number whose square root is to be calculated from the user. †¢ Get the desired precision. †¢ While more numbers remain, calculate firs guess, x0. †¢ Repeat Xn = 0.5 * (X (n-1) + Number/ X (n-1)) Until abs (Xn - X (n – 1)) *= Desired precision Get a positive number whose square root is to be calculated from the user. Get the desired precision. End while Newton-Raphson Method 1. Set number of iterations num_iter to zero.

David Walker Appeal Paper Essay

Before David Walker’s Appeal to the Colored Citizens of the World during the 1800’s, there had not been any other type of anti-slavery documents published. Although the Appeal is directed to black slaves, its powerful moral message and indictment of white America’s hypocritical society and oppressive, brutal system of slavery is a moral message that resonates to all audiences, including whites. Walker’s Appeal calls for slaves to rebel against their masters as the means of reacquiring their humanity. Walker relies heavily upon religious values of Christianity, communicating strongly with free and enslaved blacks: The man who would not fight under the Lord and Master Jesus Christ, in the glorious and heavenly cause of freedom and of God, to be delivered from the most wretched, abject and servile slavery, that ever a people was afflicted with since the foundation of the world, to the present day, ought to be kept with all his children or family, in slavery, or chains, to be butchered by his cruel enemies. (Walker Article 1) The Appeal sent out fear and terror throughout the white community as some states even passed laws that would sentence blacks, or even whites, to severe punishment if caught with the pamphlet. Finzsch cites to Eaton who points out that â€Å"in Georgia, Virginia, North Carolina, Louisiana and South Carolina anyone be it slave, free black or white who was caught with the pamphlet was tried and usually found guilty of inciting insurrection† and it also inspired enslaved blacks to fight for their freedom regardless of the consequences (Finzsch, 5). Walker’s purpose is a call for unity amongst slaves and to educate them as to their immediate need to fight back against their masters. In order to communicate his ideas, Walker attacks the values and the veracity of the United States history by pointing out the hypocrisy of the institution of slavery in a self-proclaimed nation that pretended to stand for constitutional equality, democracy and freedom. Walker powerfully challenges these notions by raising views that were being brought up mostly as a result of scientific racism and the idea that religion justifies slavery. Any discussion of abolition was always a radi cal, dangerous, and illegal conversation during the times of slavery. Slavery was the horrific social, political and economic system that allowed the United States to rapidly accumulate wealth, thus unjustly elevating whites to positions of immense power and privilege. When Walker  published his Appeal his document traveled throughout a political terrain that was controlled by whites, and these whites relied upon anti-black racist documents such as the Declaration of Independence, the United States Constitution, and Thomas Jefferson’s Notes on the State of Virginia. All of these documents systematically deemed blacks as un-human, excluding blacks from political protection, and condoned chattel slavery. Walker’s message in his Appeal resonates in the white community of that time because it directly challenges the myths relied upon by those whites in their â€Å"mythical† documents. The historical opening lines of the Declaration of Independence read â€Å"we hold these truths to be self evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty, and the pursuit of happiness.† This opening statement did not include black people, but rather it excluded them under the term that all â€Å"men† were not human. As the rest of the United States Constitution eventually clarified enslaved black people were not recognized as human beings and therefore were not entitled to the rights, privileges, and protection of the law. Furthermore, slavery was a legal institution under these sets of beliefs. Another one of the most influential documents of the time was Thomas Jefferson’s Notes on the State of Virginia of 1781. Although Jefferson owned slaves, he considered himself to be an opponent of slavery. Within the document Jefferson compared blacks to whites and concluded by holding that black people were inferior to whites on multiple levels. Have they not, after having reduced us to the deplorable condition of slaves under their feet, held us up as descending originally from the tribes of Monkeys or Orang- Outings? (Walker Article 1) Jefferson believed that emancipation for blacks should mean the removal of them from the United States based on the hostility that blacks would harbor to whites, Jefferson’s Notes on the State of Virginia further entrenched the practice of the dehumanization of black people, something that Walker’s Appeal deeply emphasizes and a message that whites and bla ck could easily understand. In order to support his call for slaves to unify and revolt against their masters Walker challenges the ideas of political documents relied upon whites. Walker effectively uses religion to pursued whites and blacks that the institution of slavery was massively unjust. Walker states that God and religion actually discouraged all forms  of slavery. For example he states, Are we MEN!! I ask you, my brethren are we MEN? Did our creator make us to be slaves to dust and ashes like ourselves? Are they not dying worms as well as we? Have they not to make their appearance before the tribunal of Heaven, to answer for the deeds done in the body, as well as we? Have we any other Master but Jesus Christ alone? Is he not their Master as well as ours? What right then, have we to obey and call any other Master, but Himself? (Walker, Article 1) Walker states that God is the lone master to which all humankind must obey. On these grounds Walker shuns the idea that black people must obey a white human master. Walker stands by the fact that the only master black people have are God himself and not the white man. Furthermore, he brings light to the fact that the white community will also have to answer to God for their acts of violence. Both blacks and whites can und erstand this religious and moral message. Not only did Walker challenge racism and the idea of religion to justify slavery, he also confronted Thomas Jefferson. Walker states:Mr. Jefferson said, when a master was murdered, all his slaves in the same house, or within hearing, were condemned to death, Here let me ask Mr. Jefferson, but he is gone to answer at the bar of God, for the deeds done in his body while living, I therefore ask the whole American people, had I not rather die, or be put to death, than to be a slave to any tyrant, who takes not only my own, but my wife and children’s lives by the inches? Yea, would I meet death with avidity far! Far!! (Walker, Article 1) Walker uses vial language to get others to understand the grotesque acts of violence that the white society inflicted on the black body and states that he would rather die fighting for freedom than be a subject to slavery. He was speaking for others who were afraid and did not have a voice, and for others who just needed a backbone and needed to be supported. Douglass’s rebellion narrative, The Heroic Slave, clearly important in its own right, is vastly diff erent from Walker in many ways. Douglass bases his work on the mutiny led by rebel slave Madison Washington on the Creole in 1841. The narrative is powerful, but the organizational intent and style is vastly different from the approach taken by Walker. Douglass uses a â€Å"storytelling† method to make his points. For example, the international sea and Britain are used by Douglass in The Heroic Slave to symbolize freedom (see Sweeny generally) And, unlike the aggressive and direct language used by Walker,  Douglass uses softer language to make his points in a more sublime manner. For example, in describing Washington as a self-emancipating figure, Douglass states, Washington is â€Å"standing erect, a smile of satisfaction . . . upon his expressive countenance, like . . . one who has just . . . .vanquished a malignant foe, for at that moment he was free . . . The future gleamed . . . .before him . . . his fetters lay broke at his feet. His air was triumphant (Douglass, Part 1). Works Cited Finzsch, Norbet. â€Å" David Walker and The Fight against Slavery † 2012. Douglas, Frederick. The Heroic Slave. Sweeney, Fionnghula. â€Å"Visual Culture and Fictive Technique in Frederick Douglass’s The Heroic Slave,† Slavery and Abolition, June 2012: 305-320. Walker, David. â€Å"Appeal to the Coloured Citizens of the World †1830.

Market Efficiency and Market Failure

CHAPTER 4 Market Efficiency and Market Failure 1. Chapter Summary Governments of over 200 cities in the United States have placed ceilings on the maximum rent some landlords can charge for their apartments. Some firms have coaxed governments into imposing price floors, which are legally determined minimum prices that sellers may receive. To understand the economic impact of government interventions in markets, it is necessary to understand consumer surplus and producer surplus.Consumer surplus is the dollar net benefit consumers receive from buying goods and services at market prices less than the maximum prices they would be willing to pay. In a demand and supply graph, consumer surplus equals the area below the demand curve and above a horizontal line drawn from the price axis to the point on the demand curve that represents the market price. Producer surplus is the dollar net benefit producers receive from selling goods and services at prices greater than the minimum prices they w ould be willing to accept.In a demand and supply graph, producer surplus is equal to the area above the supply curve and below a horizontal line drawn from the price axis to the point on the supply curve that represents the market price. In a competitive market, the equilibrium price for a good or service occurs at the quantity of product where the marginal cost of the last unit produced and sold is equal to the marginal benefit consumers receive from the last unit bought. Therefore, equilibrium in a competitive market results in an economically efficient level of output.At this same level of output economic surplus, the sum of consumer and producer surplus in this market is maximized. Some producers who believe an equilibrium price is too low will lobby for government action to set a higher legal price (a â€Å"floor price†). Some consumers who believe that an equilibrium price is too high will lobby government to legally require that a lower price (a â€Å"ceiling priceâ⠂¬ ) be charged. Although price ceilings and price floors are not common, they have been established in some markets. Price floors were established in gricultural markets in the United States during the Great Depression. Government intervention in agriculture has continued ever since. Although the administration of price floors can be complex, the basic operation of this price control involves a government commitment to maintain a price (for example, $3. 50 per bushel of wheat) that exceeds the equilibrium price (for example, $3. 00). The price floor reduces the quantity demanded of the product while it encourages producers to increase the quantity supplied.The difference between these two quantities, a surplus, is typically bought by government at the floor price. The result of the price floor is to (a) transfer some consumer surplus that would exist at the equilibrium price to producer surplus and (b) create a â€Å"deadweight loss† or a net loss of consumer and producer s urplus. The deadweight loss is also the efficiency loss that results from the price floor. Another example of a price floor is the â€Å"minimum wage,† which is a legal wage imposed above the equilibrium wage offered in the United States for most occupations.Since most workers earn wages above the minimum wage, this price (wage) floor affects low-skilled and inexperienced workers. Although the economic impact of the minimum wage is similar to that of price floors imposed in other markets (deadweight losses result), economists have disagreed about the extent to which the minimum wage reduces employment. Price ceilings are found most often in the markets for apartments in various cities; local governments will usually impose this type of price ceiling.In New York City, about 1 million apartments are subject to rent control. A simple description of the impact of a price ceiling on rent (administration of the ceiling will vary by city and over time) is that the quantity demanded at the ceiling price, for example, $1,000 per month, exceeds the quantity supplied. In contrast, if an equilibrium price of, say $1,500, were allowed, the quantity supplied would be greater and the quantity demanded would be less; these two quantities would be equal and there would be no shortage of apartments.The results of the price ceiling are to (a) transfer some producer surplus to consumer surplus and (b) create a deadweight loss or a net loss of consumer and producer surplus. Another possible result of the ceiling is the creation of a â€Å"black market† where buyers agree to rent apartments from landlords for greater than the legal price. Because the ceiling reduces quantity supplied, the black market price may exceed the equilibrium price. An externality is a benefit or cost that affects someone not directly involved in the production or consumption of a good or service.Negative externalities are costs imposed on non-consenting individuals. Positive externalities are benefits for individuals not directly involved in producing or paying for a good or service. Externalities interfere with the economic efficiency of a market equilibrium since they cause a difference between the private cost of production (the cost borne by the producer of a good or service) and the social cost, or the private benefit from consumption (the benefit received by the consumer of a good or service) and the social benefit.The social cost is the private cost plus any external cost resulting from production; the social benefit is the private benefit plus any external benefit that results from the consumption of a good or service. When there is a negative externality as the result of production, the market supply curve understates the true (social) cost of production. A supply curve that reflects social costs would lie to the left of the market supply curve. The equilibrium market price occurs where the marginal social cost of production exceeds the marginal benefit to cons umers and there is a reduction in economic surplus.Economic efficiency would be increased if less of the good or service were produced. When there is a positive externality, the market demand curve understates the social benefits from consumption of a good, and the demand curve that reflects the social benefits of this good would lie to the right of the market demand curve. At the equilibrium point, the marginal benefit exceeds the marginal cost and a deadweight loss results. Because of the positive externality, too little of the good is produced.Negative and positive externalities lead to market failure due to the absence of private property rights for physical property (for example, a store or factory) or intangible assets (for example, for a new idea to improve a production process). Market failure may also result from the difficulty of enforcing private property rights (for example, lax government enforcement of copyright laws). Most of the time, the governments of the United St ates and other high income nations provide adequate enforcement of property rights, but in certain situations, these rights do not exist or cannot be legally enforced.When private solutions to externalities are not feasible, government intervention is justified. For example, by imposing a tax equal to the external costs that result from production of a good, government can â€Å"internalize† the externality. This causes the social, not just the private, cost of production to be borne by producers. In effect, the supply curve for the good shifts to the left. This supply curve would then cross the demand curve at a higher equilibrium price and lower equilibrium quantity. When production of a good produces a positive externality, government can internalize the externality by providing a subsidy to consumers.If the subsidy is equal to the value of the externality, this has the effect of shifting the demand curve for the good to the right; market equilibrium is achieved at the eco nomically efficient level with a higher price and quantity. To reduce pollution, governments have often used a â€Å"command and control† approach. This may involve government imposition of quantitative limits on amounts of pollution firms can emit or the installation of specific pollution control devices. An exception to the command and control approach was the U. S. overnment’s attempt to reduce acid rain pollution. In the Clean Air Act passed by Congress in 1990, a reduction in sulfur dioxide emissions, a major cause of acid rain, from electric utilities was mandated. To achieve this goal, utilities were allowed to buy and sell emissions allowances. Each allowance is equal to one ton of sulfur dioxide. So long as the total amount of emissions does not exceed an annual mandated maximum amount (by 2010 this amount will be 8. 5 million tons), firms can emit sulfur dioxide in amounts equal to their allowances.Firms that face high costs of reducing sulfur dioxide have an incentive to buy more allowances than they have been allocated. Utilities that can reduce their emissions at low cost have an incentive to do so and sell some of their allowances. This program has achieved emissions reductions at much lower costs than had been expected in 1990. The success of the sulfur dioxide program has led some to suggest that a similar program be used by the United States and other nations to reduce emissions of so-called â€Å"greenhouse gases† that contribute to global warming. . Learning Objectives Students should be able to: †¢Understand the concepts of consumer surplus and producer surplus. †¢Understand the concept of economic efficiency, and use a graph to illustrate how economic efficiency is reduced when a market is not in competitive equilibrium. †¢Use demand and supply graphs to analyze the economic impact of price ceilings and floors. †¢Identify examples of positive and negative externalities and use graphs to show how ext ernalities affect economic efficiency. Analyze government policies to achieve economic efficiency in a market with an externality. 3. Chapter Outline Should the Government Control Apartment Rents? 1. Rent control is an example of government regulation of prices. Rent controls (a type of price ceiling) exist in about 200 cities in the United States. Although the rules that govern rent control are complex and vary by city, rent control drives up the demand and price for apartments not subject to the controls. Consumer Surplus and Producer Surplus 1.Consumer surplus is the difference between the highest price a consumer is willing and able to pay and the price the consumer actually pays. 2. Producer surplus is the difference between the lowest price a firm would have been willing and able to accept and the price it actually receives. A. Consumer and producer surplus represent the net benefits consumers and producers receive from buying and selling a good or service in a market. B. Pric e ceilings and price floors reduce the economic surplus (this is consumer surplus plus producer surplus in a given market).C. Marginal benefit is the benefit to a consumer from consuming one more unit of a good or service. D. The height of a market demand curve at a given quantity measures the marginal benefit to someone from consuming that quantity. Consumer surplus refers to the difference between this marginal benefit and the market price the consumer pays. E. Total consumer surplus is the difference between marginal benefit and price for all quantities bought by consumers; this is shown in a demand curve as the area below the demand curve and above the market price.F. Marginal cost is the additional cost to a firm of producing one more unit of a good or service. G. The height of a market supply curve at a given quantity measures the marginal cost of the last unit produced for the producer. Producer surplus refers to the difference between this marginal cost and the market price the producer receives. H. Total producer surplus equals the difference between marginal cost and price for all quantities sold by producers. The Efficiency of Competitive Markets 1.When equilibrium is reached in a competitive market, the marginal benefit from the last unit sold will equal the marginal cost of producing that last unit. This is an economically efficient outcome. A. If less than the equilibrium output were produced, the marginal benefit of the last unit bought would exceed its marginal cost. B. If more than equilibrium quantity were produced, the marginal benefit of this last unit would be less than its marginal (opportunity) cost. C. Economic surplus is the sum of consumer and producer surplus.Economic surplus, or the net benefit to society from the production of a good or service, is maximized at equilibrium in a competitive market (when there are no externalities). D. A deadweight loss is the reduction in economic surplus resulting from a market not being in competi tive equilibrium. E. Economic efficiency is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production, and where the sum of consumer and producer surplus is at a maximum. Government Intervention in the Market: Price Floors and Price Ceilings 1.Though the total benefit to society is maximized at a competitive market equilibrium, individual consumers would be better off if they could pay a lower than equilibrium price, and individual producers would be better off if they could sell at a higher than equilibrium price. 2. Consumers and producers sometimes lobby government to legally require a market price different from the equilibrium price. These lobbying efforts are sometimes successful. 3. Price floors were established in agricultural markets during the Great Depression in response to pleas from farmers who could sell their product only at low prices.A. A price floor is a legally determined minimum price that se llers may receive. B. A price floor encourages producers to produce more output than consumers want to buy at the floor price. C. The surplus (equal to the quantity supplied minus the quantity demanded at the floor price) that results from a price floor is typically bought and stored by the government. D. The marginal cost of the last unit produced exceeds its marginal benefit and there is a deadweight loss which reflects a decline in efficiency due to the price floor. 4.A price ceiling is a legally determined maximum price that sellers may charge. A. Price ceilings are meant to help consumers who may lobby for a price ceiling after a sharp increase in the price of an item on which they spend a significant amount of their budgets (for example, rent and energy). B. At the ceiling price, the quantity demanded is greater than the quantity supplied so that the marginal benefit of the last item sold (the quantity supplied) exceeds the marginal cost of producing it. C. Price ceilings resu lt in a deadweight loss and a reduction of economic efficiency.D. Price ceilings create incentives for black markets. A black market refers to buying and selling at prices that violate government price regulations. Externalities and Efficiency 1. An externality is a benefit or cost that affects someone who is not directly involved in the production or consumption of a good or service. A. Positive externalities refer to benefits received from a good or service by consumers who do not pay for them. B. Negative externalities refer to costs incurred by individuals from a good or service for which no one pays.C. A private cost is a cost borne by the producer of a good or service. D. A social cost is the total cost of production, including both the private cost and any external cost. E. A private benefit is the benefit received by the consumer of a good or service. F. A social benefit is the total benefit from consuming a good, including both the private benefit and any external benefit. G. A negative externality causes the social cost of production for a good or service to be greater than the private cost. As a result, more han the economically efficient level of output is produced. H. A positive externality causes the social benefit from the production of a good or service to be greater than the private benefit. As a result, less than the economically efficient level of output is produced. A. Market failure refers to situations where the market fails to produce the efficient level of output. B. Figure 4-9 illustrates the effect of acid rain on the market for electricity and the deadweight loss that occurs due to a negative externality. C.Figure 4-10 illustrates the impact of a positive externality in the market for a college education and the deadweight loss caused by this externality. 3. In the absence of private solutions to externalities, government intervention is warranted. To achieve economic efficiency, governments may intervene in different ways. A. To red uce pollution, â€Å"command and control† policies have often been employed. A command and control approach refers to government-imposed quantitative limits on the amount of pollution firms are allowed to generate, or government-required installation by firms of specific pollution control devices.B. Since 1990, a market-based approach to reducing sulfur dioxide emissions from electric utilities has reduced emissions at much lower cost than was expected. The success of this approach has led economists to advocate more extensive use of market-based approaches, and less use of command and control policies, to reduce other forms of pollution. Homework Problems – Not to be submitted: 1. From the Review Questions: Try all of them! 2. From the Problems and Applications: #s: 3, 4, 5, 16, and 20. 3. From the APPENDIX: REVIEW QUESTIONS #S 3 AND 4.