Comparison of Perfect and Imperfect Competition

Comparison of Perfect and Imperfect Competition INTRODUCTION The Father of Economics Adam Smith in his book â€Å" The Theory of Moral Sentiments†, wrote about the main characteristics of human beings. According to him a human being is very selfish or possesses self-love as well as there exists an invisible hand. The concept of self- love in human being is one of the most important factor in â€Å" the value theory† as well as in the development of market. [1] Generally a human being carries out economic activities till a point where he thinks that what I am paying is equal to what I am receiving, Human being willingly trade or carry out exchange till he feels that what I am giving is less and what I am receiving is more, once he realises that what I am giving is equal to what I am receiving, he will stop further trade. This is one of the most important philosophy of consumers and producers. Both the concept is based on selfish motives of maximising returns in terms of their efforts that is money. Since an economy consists of various economic agents with diverse interests, allocating resources optimally becomes an intricate task. Economic planners have two mutually opposing means to solve this allocation problem: planning versus competition. Which avenue will be adopted by the planners depends crucially on their value judgments. WHAT IS A MARKET? â€Å"Originally† says Jevons, : a market was a public place in a town where provisions and other objects were exposed for sale; but the world has been generalised so as to mean any body of persons who are in intimate business relations and carry on extensive transactions in any commodity. In the words of Cournot, a French economist, â€Å"Economics understand by the term market not any particular market placec in which things are bought and sold but the whole of any region in which buyers and sellers are in such free intercourse with one another that the price of the same goods tends to equality easily and quickly.† Thus, the essentials of market are: A commodity which is dealt with. The existence of buyers and sellers A place, be it certain region, country or entire world. Such intercourse between buyers and sellers that only one price should prevail for the same commodity at the same time. PERFECT COMPETITION Perfect competition is a theoretical market structure. Perfect competition is the world of price-takers. A perfectly competitive firm sells a homogenous product. It is so small relative to its market that it cannot affect the market price; it simply takes the price as give. Under perfect competition, there are many buyers and sellers, and prices reflect supply and demand. Also, consumers have many substitutes if the good or service they wish to buy becomes too expensive or its quality begins to fall short. New firms can easily enter the market, generating additional competition. Companies earn just enough profit to stay in business and no more, because if they were to earn excess profits, other companies would enter the market and drive profits back down to the bare minimum. Real-world competition differs from the textbook model of perfect competition in many ways. Real companies try to make their products different from those of their competitors. They advertise to try to gain market share. They cut prices to try to take customers away from other firms. They raise prices in the hope of increasing profits. And some firms are large enough to affect market prices. But the perfect competition model is not an ideal that we should try to achieve in the real world. Features of Perfect Competition There are many small firms, each producing an identical product . Each too small to effect the market price. The perfect competitior faces a completely horizontal demand curve. The extra revenue gained from each extra unit sold is therefore the market price. Freedom of Entry and Exit; this will require low sunk costs.[2] Diagram for Perfect Competition These factors are unrealistic in the real world. However Perfect Competition is as important economic model to compare other models. It is often argued that competitive markets have many benefits which stem from this theoretical model. In the Industry price is determined by the interaction of Supply and Demand. The firm will maximise output where MR = MC at Q1 In the Long Run Firms will make Normal profits. If Supernormal profits are made new firms will be attracted into the industry causing prices to fall. If firms are making a loss then firms will leave the industry causing price to rise.[3] Assumptions behind a Perfectly Competitive Market Many suppliers each with an insignificant share of the market – this means that each firm is too small relative to the overall market to affect price via a change in its own supply – each individual firm is assumed to be a price taker An identical output produced by each firm – in other words, the market supplies homogeneous or standardised products that are perfect substitutes for each other. Consumers perceive the products to be identical Consumers have perfect information about the prices all sellers in the market charge – so if some firms decide to charge a price higher than the ruling market price, there will be a large substitution effect away from this firm All firms (industry participants and new entrants) are assumed to have equal access to resources (technology, other factor inputs) and improvements in production technologies achieved by one firm can spill-over to all the other suppliers in the market. [4] IMPERFECT COMPETITION Imperfect competition is a competitive market situation where there are many sellers, but they are selling heterogeneous (dissimilar) goods as opposed to the perfect competitive market scenario. As the name suggests, competitive markets that are imperfect in nature. Imperfect competition is the real world competition. Today some of the industries and sellers follow it to earn surplus profits. In this market scenario, the seller enjoys the luxury of influencing the price in order to earn more profits. It prevails in an industry whenever individual sellers have some measure of control over the price of their output. Take the example of Coco-cola and perpsi together have the majpr share of the market, and imperfect competition clearly prevails. If a seller is selling a non-identical good in the market, then he can raise the prices and earn profits. High profits attract other sellers to enter the market and sellers, who are incurring losses, can very easily exit the market. The major types of imperfect competition are: monopoly, oligopoly and monopolistic competition. Monopolistic Competition: This market structure is characterized by a large number of relatively small competitors, each with a modest degree of market controlon the supply side. A key feature of monopolistic competition is product differentiation. The output of each producer is a close but not identical substitute to that of every other firm, which helps satisfy diverse consumer wants and needs. Oligopoly: This market structure is characterized by a small number of relatively large competitors, each with substantial market control. Oligopoly sellers exhibit interdependent decision making which can lead to intense competition among the few and the motivation to cooperate through mergers and collisions. Monopoly: Monopolies are thus characterized by a lack of economic  competition  to produce the  good  or  service  and a lack of viablesubstitute goods. Monopoly is an enterprise that is the only seller of a good or service. In the absence of government intervention, a monopoly is free to set any price it chooses and will usually set the price that yields the largest possible profit. Just being a monopoly need not make an enterprise more profitable than other enterprises that face competition, the market may be so small that it barely supports one enterprise. But if the monopoly is in fact more profitable than competitive enterprises, economists expect that other entrepreneurs will enter the business to capture some of the higher returns. If enough rivals enter, their competition will drive prices down and eliminate monopoly power. COMPARISION OF VARIOUS MARKETS A distinction has been made between perfect and imperfect competition. â€Å" A market is said to be perfect when all the potential sellers and buyers are promptly aware of the prices at which transactions take place and all the offers made by other sellers and buyers, and when any buyer can purchase from any seller. Same price same commodity same times is essential characteristic of perfect market. [5] On the other hand, a market is imperfect when some buyers or sellers or both are not aware of the prices made by others. Different prices come to prevail for the same commodity at the same time in an imperfect market. STRUCTURE NO.OF PRODUCERS AND DEGREE OF PRODUCT DIFFERENTIATION PART OF ECONOMY WHERE IT’S PREVALENT FIRM’S DEGREE OF CONTROL METHODS PF MARKETING Perfect Competition Many products; identical products. Financial markets and agricultural products None Market exchange or auction. Imperfect Competition Monopolistic Competition Many producers; many real differences in products. Retail trade like pizzas, beer. Some Advertising and quality rivalry administered prices. Oligopoly Few producers; little or no difference in product. Steel, chemicals some Advertising and quality rivalry administered prices. Monopoly Single producer; product without close substitutes. Franchise monopolies like electricity, water,drugs considerable Advertising COMPARISION ON BASIS OF DEMAND In economics, basically  demand  is the utility for a good or service of an economic agent, relative to his income. Demand is a buyers willingness and ability to pay a price for a specific quantity of a good or service.   Ã‚   Demand refers to how much (quantity) of a product or service is desired by buyers at various prices. The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand. The term demand signifies the ability or the willingness to buy a particular commodity at a given point of time. In the above diagram, PART A reflects that the perfect competitor faces a horizontal demand curve, indicating that it can sell all it wants at the going market price. The price elasticity is perfectly elastic. When there is pure competition, since the number of firms is large, no individual has power to influence the market price. Also, since the products are identical from the consumer’s point of view, the price paid by them can’t be different. OX and OY are two axes. Along OX is the output and the OY is the price/revenue. At OP price a seller can sell as much as he likes. He cannot charge more and not charge less because then he’ll lose all his customers. PART B says that an imperfect competition, in contrast, faces a downward sloping demand curve. Meaning that if an imperfect competitive firm increases its sales, it will definitely depress the market price of its output as it moves down its dd curve. The price elasticity is finite elastic. [6] COMPARISON  ON BASIS OF SUPPLY Competitive firm has direct implications for the market supply curve and the law of supply. The primary conclusion is that a perfectly competitive firms short-run supply curve is that segment of its marginal cost curve that lies above the average variable costcurve. A perfectly competitive firm produces the quantity of output that equates marginal revenue, which is equal to price, and marginal cost, as long as price exceeds average variable cost. The profit-maximizing choices of output at alternative prices generate the perfectly competitive firms short-run supply curve. Consider three key points: A profit-maximizing firm produces the quantity of output that equates marginal revenue and marginal cost (MR = MC). A perfectly competitive firm is characterized by the equality between price and marginal revenue (P = MR). The law of diminishing marginal returns gives the marginal cost curve a positive slope. Combining all three points means that a profit-maximizing perfectly competitive firm produces the quantity of output that equates price and marginal cost (P = MC). An increase in the price, moves the profit-maximizing quantity to a higher point on the positively-sloped marginal cost curve, and a larger production quantity. A decrease in the price, moves the profit-maximizing quantity to a lower point on the positively-sloped marginal cost curve, and a smaller production quantity. REAL WORLD SCENARIO In the post independence era, India adopted highly restrictive industrial policy. India’s industrial licensing policy created entry barriers for private enterprises in sectors earmarked for them and hence didn’t promote ‘perfect competition’. Indian planners who believed in the doctrine of ‘infant industry argument’ provided necessary protection to domestic manufactures from foreign competition by way of tariff barriers. During this regulated regime, however, India’s industrial growth rate was not promising. In India, under Structural Adjustment Programme (SAP), industrial licensing policy was abolished and tariff and quantity restrictions on imports were also dispensed with. Thus the New Economic Policy made an effort to promote a competitive market system in India. As a result India’s industrial sector started showing some signs of improvement in terms of growth.[7] In the real world, situations like perfect market exists for markets for most of unbranded staple goods such as food grain and vegetables. However it should be noted that there is a trend of branding more and more of such goods also, and in this ways making their markets become more and more like oligopolistic markets. In a monopoly like in Saudi Arabia the government has sole control over the oil industry. A monopoly may also form when a company has a copyright or patent that prevents others from entering the market. Pfizer, for instance, had a patent on Viagra. In an oligopoly, assume, for example, that an economy needs only 100 widgets. Company X produces 50 widgets and its competitor, Company Y, produces the other 50. The prices of the two brands will be interdependent and, therefore, similar. So, if Company X starts selling the widgets at a lower price, it will get a greater market share, thereby forcing Company Y to lower its prices as well. There are two extreme forms of market structure: monopoly and, its opposite, perfect competition. Perfect competition is characterized by many buyers and sellers, many products that are similar in nature and, as a result, many substitutes. Perfect competition means there are few, if any, barriers to entry for new companies, and prices are determined by su pply and demand. Thus, producers in a perfectly competitive market are subject to the prices determined by the market and do not have any leverage. For example, in a perfectly competitive market, should a single firm decide to increase its selling price of a good, the consumers can just turn to the nearest competitor for a better price, causing any firm that increases its prices to lose market share and profits. CRITICISMS OF PERFECT COMPETITION The use of the assumption of perfect competition as the foundation ofprice theoryfor product markets is often criticized as representing all agents as passive, thus removing the active attempts to increase ones welfare or profits by price undercutting, product design, advertising, innovation, activities that the critics argue – characterize most industries and markets. These criticisms point to the frequent lack of realism of the assumptions ofproduct homogenity and impossibility to differentiate it, but apart from this the accusation of passivity appears correct only for short-period or very-short-period analyses, in long-period analyses the inability of price to diverge from the natural or long-period price is due to active reactions of entry or exit. Some economists have a different kind of criticism concerning perfect competition model. They are not criticizing theprice taker assumption because it makes economic agents too passive, but because it then raises the question of who sets the prices. Indeed, if everyone is price taker, there is the need for a benevolent planner who gives and sets the prices, in other word, there is a need for a price maker. Therefore, it makes the perfect competition model appropriate not to describe a decentralize market economy but a centralized one. This in turn means that such kind of model has more to do with communism than capitalism. Another frequent criticism is that it is often not true that in the short run differences between supply and demand cause changes in price; especially in manufacturing, the more common behaviour is alteration of production without nearly any alteration of price. CONCLUSION In this industrial and competitive world not everyone has a chance to excel. Sometimes there is boom period in the economy when the firm’s income flourishes while at other times there can be a depression which will create losses for the firm. It is thus a firm’s ability to manage its resources carefully and feasibly. Why do consumers spend their income on new brands? A classical reference may be in order: â€Å"The love of novelty manifests itself equally in those who are well off and in those who are not. For . . . men get tired of prosperity, just as they are afflicted by the reverse. . . . This love of change . . . opens the way to everyone who takes the lead in any innovation in any country.† Thus, in an economy there will be different types of market and each market will have its own pros and cons it just depends on the various innovations they undertake to attract more consumers. Both perfect and imperfect competitions excel in their fields. BIBLIOGRAPHY BOOKS: Nordhaus, Samuelson. (2008) Economics. Tata Mc-Graw-Hill Publishing Company Limited. Dewett, K.K., Nevalur, M.H., Modern Economic Theory, S. Chand, New Delhi, 2010. WEBSITES: http://www.economicshelp.org/microessays/markets/perfect-competition/ http://tutor2u.net/economics/content/topics/competition/competition.htm http://www.economicshelp.org/microessays/markets/perfect-competition/ http://www.cci.gov.in/May2011/Advocacy/essay2012/jyoti.pdf [1] Dewett, K.K., Nevalur, M.H., Modern Economic Theory, S. Chand, New Delhi, 2010. [2] http://www.economicshelp.org/microessays/markets/perfect-competition/ [3] http://www.economicshelp.org/microessays/markets/perfect-competition/ [4] http://tutor2u.net/economics/content/topics/competition/competition.htm [5] Dewett, K.K., Nevalur, M.H., Modern Economic Theory, S. Chand, New Delhi, 2010. [6] Nordhaus, Samuelson. (2008) Economics. Tata Mc-Graw-Hill Publishing Company Limited. [7] The Index of Industrial Production (IIP) was 6.2 percent for April-Dec, 1999.

How To Improve School For Todays Young Learners Education Essay

How To Improve School For Todays Young Learners Education Essay There is a significant amount of research that has explored the benefits of in-school Physical education. With a large number of schools and students participating, control groups have been able to track the advantages and disadvantages of in-school Physical education. The conclusions, interpretations, and suggestions for Physical Education have determined an overall academic performance increase has occurred in the students with proper Physical Education instruction. The need to improve the school systems for todays young learners should be at the pinnacle of education reform. How to improve school for todays young learners There is a rising concern with the development of our children and their academic performance in comparison to other industrialized countries throughout the world. If the United States wants to remain competitive in the world market, it needs to address the issues involving the future generations. If the education of past generations has proven to be inadequate, an elucidation for improving the school systems will create smarter generations for the future. Improving the nations school system is a difficult and delicate project. If we try to change the curriculum, determining which curriculum to change becomes far too analytical. Does reading need more attention than writing? Does writing need more attention than Arithmetic? Subjecting every student to standardized test has been the determinant of all the prevailing questions. Teach to the test is the routine saying to describe our elementary academics. The focus is on the test, and has taken away from the learning. The standardized t esting does little to improve the knowledge of the student, but the learning gives the students a priceless commodity. The schools need to look at more progressive means of improvement; address the needs of the students and the teachers, not the states requirements for test scores. There has been significant research on the effects of in-school Physical Education and its benefits. The continuation of in-school physical education will improve  overall student academic performance and an  array of physical and mental skills. Physical Education is a subject that is creates better students and has an additional benefit of health. Schools currently have Physical Education as part of the daily curriculum, but the amount of time allotted for proper physical education is diminishing. This may be adversely affecting the overall performance, students who had moderate to high levels of physical activity within P.E. reported fewer attention problems during class and more years of post-high school educationalà ¢Ã¢â€š ¬Ã‚ ¦ (Exner, A. 2009). An example of a modification to the school curriculum would be to reduce the amount of time for lunch and recess and introduce organized sport or play. The additional physical activity increases the attentiveness of the students, and will result in better comprehension or retention of the course material. With a better understanding of the school material the students are more confident in their studies and are more willing to pursue post high school education. If our nation wants stay competitive with other nations, we need to develop smarter students from the infancy of education, not better test takers. The mental skills enhancements associated with exercise, research shows that physical activity improves academic skill learning, concentration, memory, classroom behavior, and general academic performance, (Exner, A. 2009) are the things that need to be addressed. If schools focus on developing the concentration and memory of children, then the children will learn more in the allotted time for school. Developing the skills to learn as well as learning itself will benefit our school system tremendously. Classroom instruction is an essential in the foundation of education, and quality Physical Education should be included. Physical Education is a complicated; insuring that schools properly apply all the right formulas for physical education will result in better cognition in children. Lounsbery and Smith (2009) have indentified that Quality physical education is defined by standards related to five critical elements: (1) who teaches it, (2) how often students receive it, (3) what is taught, (4) how well students should perform, and (5) for what purpose it is taught. The schools need to be sure all teachers receive, at minimum, basic physical activity training. Giving the teachers the tools to properly apply physical education will assist them with the in classroom subjects as well. A proper balance of education in schools needs to be maintained. If we take away from physical education and give to math or reading the equilibrium of education is thrown off. Academic achievement will prevail in the students with the proper amount of Physical Education. Our nation is falling behind on the overall test scores, due to the change in curriculum. Sometimes it is necessary to cut subjects due to budgetary constraints, but cutting the things that adversely affect the students is a better idea than reducing the subject proven to increase the productivity of the students. When legislation calls for education budget cuts, the first things on the chopping block are physical activities and extra curricular sports programs. The demands of politicians and the government are obstructing the advancement of academic performance in this country. Balancing the subjects in all area of the academic process needs to be maintained, in order to provide students with the necessary tools to succeed in school and life. An equal treatment of all subjects will create an atmosphere for higher learning standards. As youths make the transition to adulthood, they require skills that will aid them in making self-assessments, planning personal programs, setting goals à ¢Ã¢â€š ¬Ã‚ ¦(self-monitoring), making decisions, and solving problems (Le Masurier, G,   Corbin, C.  2006). In order to make schools better for the young learners of today and generations to come, addressing the needs of developing mind and body go hand in hand. The body is the carrying case for the mind and its capabilities. The multiple benefits of Physical education extend outside of the classroom. Personal growth and maturity in the decision making process are also among the many values to physical education. Schools want for the students to achieve high test scores, at the risk of becoming in-sufficient in other fields of education. Schools primary obligation to the student is to properly prepare and develop the mind and body for what ever lies ahead. Whether is be running companies, raising families, or governing countries, the students that are given the proper education from the beginning will be more successful.

World Rulers :: essays papers

World Rulers Alexander the Great, Julius Caesar, and Genghis Khan This paper will explore the lives of three of the most well known rulers in human history, Alexander the Great, Julius Caesar, and Genghis Khan. This will first consist of an examination of the personalities and gifts of each of these rulers. Details of the course and extent of the conquests and achievements of each individual will follow this. The lasting contributions made by these three men will then be noted. The first ruler under consideration is Alexander the Great. He was the son of Philip II , King of Macedonia, and his wife Olympia, in the year 356 B.C. (^Alexander^). He was a student of Aristotle, and gained interests in the areas of philosophy, medicine, and scientific investigation (^Alexander^). Aristotle took great care in providing Alexander with a very structured and disciplined education (Williams 7-9). However, Alexander^s father, Philip II, would not allow Alexander to form the habits of a recluse. Philip initiated Alexander early with the duties of his high station. It was in this role that Alexander showed his ability to lead men, and be a great administrator. At age sixteen, Alexander was appointed Regent of Macedonia, while Phillip was detained at the siege of Byzantium (Williams 10). It has been noted that Alexander, by this point, had already astonished some Persian deputies by the pertinency of his questions, and the acuteness of his intellect (Williams 10). By the time he was eighteen, Alexander had commanded the left wing of the army at the battle of Chaeroneia, and defeated the Thebans (Williams 10-11). The following is an account of the words of Arrian, an acquaintance of Alexander. He spoke these words Alexander^s death on June 13, 323 B.C.: Let him who would vilify Alexander, not select a few blameworthy acts, but sum up all his great deeds and qualities, and then consider who and what he himself is who would thus abuse the man who attained the pinnacle of human felicity^who was the undisputed monarch of both continents^and whose name has pervaded the whole of the earth^ My own opinion, therefore, I will profess, that not without especial purpose of the deity such a man was given to the world, to whom none has ever yet been equal (Williams 409). The date of Julius Caesar^s birth is in dispute. The probable date was July 12 or 13, 100 B.C. (David 12). His father was Gaius Caesar, who died when Julius was only sixteen.

separation of powers Essays -- essays research papers

In the United States government there are 3 branches of government, the power given to the central government is divided among these 3 branches. Each of these branches are given powers so that they can check the powers of the other 2 branches ensuring that one branch doesn’t become to powerful One of these branches is the legislative branch this is the branch that includes congress, they are responsible for making laws. The second branch of government is the executive branch this is the branch that includes the president, they are responsible for carrying out laws. The last branch of government is the judicial branch, this branch includes the Supreme Court they are responsible for making sure laws are constitutional. There many different ways at which each of these branches check the powers of the next branch, they include appointing new members to each branch, vetoing laws proposed by a branch, declaring a law unconstitutional and many other different powers.   Ã‚  Ã‚  Ã‚  Ã‚  The legislative branch just like every other branch in the government has the power to check other ones and is checked by the opposing branches. This legislative branch checks the powers of the executive branch in many different ways ensuring that they do not become overpowering. One way in which the legislative branch checks the power of the executive branch is if congress †the legislative branch† decides that the president is not doing his job to the full extent that he should, they have...

Proper Etiquette and Interview Skills Essay -- Etiquette Interviews Ma

Proper Etiquette and Interview Skills Business Etiquette Business etiquette is made up of significantly more important things than knowing which fork to use at lunch with a client. People may feel that if you can't be trusted not to embarrass yourself in business and social situations, you may lack the self-control necessary to be good at what you do. Etiquette is about presenting yourself with the kind of polish that shows you can be taken seriously. Etiquette is also about being comfortable around people (and making them comfortable around you!) Being a good conversationalist To be a successful conversationalist, you must also believe that listening is power. Because our society places so much emphasis on speaking as the way to win friends and influence people, good listeners can quietly have a powerful and subversive impact. You should also remember that speakers have little power without listeners. Speakers share their wisdom and try to persuade, but listeners make meaning of what is heard -- they make the ultimate decision to act on what they hear. When it comes to talking during an interview, sometimes less is more. As a general rule, you should speak one-third of the time and definitely no more than half of the time. That's because the best interviews have a give-and-take atmosphere where you're discussing who the company is looking for, why you're the right candidate and how having you on board will solve the firm's challenges. To do this, you need to ask questions and try to draw out your interviewer rather than talking about yourself nonstop. Phone Etiquette Employers use telephone interviews as a way of identifying and recruiting candidates for employment. Phone interviews are often used to screen candidates in order to narrow the pool of applicants who will be invited for in-person interviews. They are also used as way to minimize the expenses involved in interviewing out-of-town candidates. While you're actively job searching, it's important to be prepared for a phone interview on a moments notice. You never know when a recruiter or a networking contact might call and ask if you have a few minutes to talk. Good phone ability is a requirement of almost every job at all levels. This is a chance to demonstrate your phone communications skills. Face-to-face communication consists of three elements: words, tone of voice and bo... ...gh your training program each year? †¢ How does your company's tuition reimbursement program work? †¢ What new product lines/services have been announced recently? †¢ What is the average age of top management? †¢ Will you describe ______________ to me? (The personality of a ranking officer often reveals a lot about the company philosophy). †¢ Could you tell me about public transportation to your company? †¢ How many people are you interviewing for this position? †¢ What are the things you like least/most about working here? †¢ If I am extended an offer of employment, how soon after this would you like me to start? †¢ When can I expect to hear from you? As the interview closes, be sure to express interest in the position and briefly summarize why you are qualified. Then ask what the next step will be or when you can expect to hear from the interviewer. This inquiry demonstrates your confidence and interest and gives you important information. Finally, ask for a business card so you can send a thank you letter within 24 hours. If no card is available, make sure you learn the correct spelling of the interviewer's first and last name.

Public health policy analysis Essay

Public health policy analysis Introduction   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Legalization of marijuana has been a heated issue and is featured both in local and national media. The use of marijuana by adults and youth in United States is on the increase. Marijuana use remains a medical problem concern since marijuana users are more susceptible to disorders associated to marijuana use. In the last decades state policies aimed marijuana use for medical purposes, while recent policies are advocating for legalization of marijuana to adults. Public relations campaigns fully advocate for the legalization of marijuana. The main reason being that prohibition of marijuana cause more harm than good and also fuel violence in the markets. The increased use of marijuana amongst the youth is enough evidence of failed control measures against marijuana. These opinions come together to enhance promotion of marijuana legalization (Gerber et al, 2004).   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The recent opinions to legalize marijuana raised concerns to (ASAM) American Society of Addiction Medicine. In April 2012, they had to form committee to develop the reaction due to the proposal of marijuana legalization. The committee aims at informing the public about marijuana legalization of marijuana and their judgment to the public policymakers. The ASAM recommends that the chemicals in marijuana that deem an effective treatment against some illnesses should be legalized as characterized and standardized products; permitted by the Food and Drug and be dispensed by professional pharmacies just like any other medicine. ASAM’s greatest concern is due to the opinion that marijuana is the most common abused illegal drug in America. Clear distinction between decriminalization and legalization is necessary in explanation of objectives and negative impact of marijuana legalization. Legalization deals with the commercialization of produ ction, use and sale of marijuana. On the other hand, decriminalization removes penalties to personal use while sale and production of marijuana is prohibited. However, ASAM does not support legalization of marijuana since their research findings reveal that marijuana smoking is not a medicine. Background and relevance   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Marijuana use has several dreadful health effects which raise concern to public health sector. Marijuana can lead to addiction as well as effects of (THC) delta-9-tetrahydrocannabinol. Research reveals that 9% of marijuana becomes addicted. Marijuana smokers who try to quit suffer from anxiety, depression, insomnia, irritability, and appetite disturbance. In 1993, the National Institute on Drug Abuse carried a study that found that marijuana led to an estimate of 7% of treatment admissions funded by the government. The number increased to 18% in 2009. In Central and Western Europe marijuana use is a critical public health issue. Marijuana is said to be the basic drug being abused in 21% of the incidents in addiction reform services in Central and Western Europe, and 14% of incidents in addiction reforms services in Southeast and Eastern Europe. Research found that of all drug treatment teenage patients, 83% were undergoing treatment for ba sic marijuana use. Retrieved from http://www.asam.org/policies/state-level-proposals-to-legalize-marijuana   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Young adults are more prevalent to marijuana addiction. Research from U.S. treatment centers shows that if drug use is started at tender age there is greater risk of dependence. Early use of marijuana might be one of the causes of increased admissions for marijuana addiction treatment. In Europe, the number of patients seeking treatment due to marijuana addiction increased from 200% from 1999 till 2006, and recently stands at 30% of overall admission cases. There are other many health hazards associated to marijuana use apart from addiction. ASAM great concern put a lot of weight to the following major areas.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The brain: substances from marijuana results to short-term impact on the brain in relation to attention, verbal fluency, sensory perception, learning, memory, and perception of time. The greatest concern is marijuana consumption during teenage where brain development is in progress. This results to decreased neurocognitive activity.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Mental health: NIDA found that marijuana use is associated to increased anxiety, schizophrenia and depression. Research studies brought out age factor as a significant risk factor. Research shows that there is correlation between early marijuana consumption and worsening and development of symptoms of schizophrenia. High usage of marijuana can cause acute psychotic reaction as well as initiating the beginning or degeneration of schizophrenia in susceptible persons.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Prenatal or perinatal: some research findings have suggested that marijuana causes retarded fetal growth including length, gestational age, birth weight, and head circumference. Other long-term effects vary with age. They include depression, decreased wit, and addiction.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Respiratory or pulmonary: research reveals that marijuana contains more tar, carcinogen and carbon monoxide as compared to tobacco. Marijuana is likely to deposit tar four times as compared to tobacco. Chronic smoking has detrimental effects to the lungs. Marijuana smokers inhale greater volumes of smoke and hold it for longer periods. Research reveals that marijuana smokers are more susceptible to bullous disease as compared to cigarette teen smokers.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Addiction among other health hazards associated to marijuana outlines that marijuana use affects both the user and their family members. ASAM is concerned since they see that the current discussion is only concerned with reforms to the ongoing marijuana policy and less concerned with detrimental impact of marijuana consumption. Harmful health and safety impacts of marijuana will be of great importance in the decision making in the development a marijuana policy with an aim of improving public health. Objectives of marijuana legalization   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Legalization of marijuana is considered as a public and safety measure aimed at reducing drug-associated crimes and as a remedy to harm caused by marijuana control such as incarceration among others. Advocators of marijuana believe that legalization of marijuana will reduce illegal marijuana trade and violent crimes associated with the illegal trade. They also believe that it will be a source of revenue as well as reduce cost of law enforcement. There is an ongoing research to investigate the impact of marijuana legalization in United States. Prohibition of drugs such as marijuana increases costs of businesses operations due to violence involved to the illegal drug trafficking. The price of marijuana is expected to reduce to 80% since the social price depend on regulation and taxes. Retrieved from http://www.asam.org/policies/state-level-proposals-to-legalize-marijuana   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   RAND research reveals that marijuana legalization I California would not reduce drug trafficking as well as violence associated with illegal drug trafficking. Research reveals that diverted marijuana from legalized production in a given country affects all the others since it would lead to reduction of marijuana across that country. Price elasticity of marijuana under legalized plan is complicated since addictive substances behave differently from non-addictive substances. Marijuana legalization will change it from being luxury for first time users to basic necessity to the marijuana addicted persons. Legalization of marijuana is likely to be accompanied by legal advertisement of commercial use marijuana this is likely to increase marijuana consumption. Although most research were carried to investigate effect of marijuana legalization in California, the findings might also apply in another state. Legalization of marijuana might cause effe cts to the taxes, prices, markets as well as spilling over their effects to the neighboring countries. Legalizing marijuana might be a right step since it will substantiate impact of violent related to illegal drug trafficking. It is also believed that public health problems of criminal justice interventions exceed their benefits. This leads to the question as to whether legalization proposals should be passed and amended. Lessening toughness to marijuana use might not be so much fruitful since there can be little or no reduction in the level of substantial costs and incarceration rates (Morgan, 2011). Negative impact of legalizing marijuana   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Any state considering altering legal condition of marijuana should consider the health hazard involved as well as the profit of coping up with criminalization of marijuana use and sale. Legal drug use provides evidence that it is national public health issue. Legal drugs recently cause a havoc on public health sector since it results to substantial health and financial burden. Legalizing marijuana is likely to lead to an increase in the social costs due to taxes imposed due to the sale of the drugs. The cost of coming up with a regulatory plan for legal marijuana is also unknown. Although legalization of marijuana might be aimed at increasing funding for prevention, addiction and treatment of commercial activities linked to legal marijuana. Health effects of gradual increase use of marijuana would rise sharply. It is also likely that legalization of marijuana will be accompanied by increase in number of marijuana related issues such as dri ving under marijuana influence, violations in act regulating age limits as well as public use violations. Research reveals that marijuana is the most famous drug associated to drugged driving. Fatal injuries, crashes and even deaths are commonly linked to habitual marijuana use. Drugged driving will raise the cost of injuries, loss of lives and crashes. Decreased highway safety is a major negative impact of marijuana legalization (Gerber et al, 2004).   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   American Academy of Pediatrics predicted that legalizing marijuana will result to increased use of marijuana amongst the youth. The fact is that there is a positive relationship between drug use and availability. Advocators of the policy should consider detrimental effects of marijuana availability to the society if the law was passed and amended. There will be an increased incidents of marijuana related cases, addiction as well as the regulatory cost that will be passed to the public in form of taxes. International context   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The advocators of marijuana legalization policy usually come from experience from nations with less strict policies on drug use. It should not be understood that no country has ever legalized marijuana. Most countries use decriminalization policies where they have a specific limit of marijuana or a given drug use for personal purposes while drug use for commercial services remains illegal. In a country like Netherlands, commercial drug businesses are illegal and are constrained with criminal sanctions. Other than being arrested, drug users are put in check by the Commission for the Dissuasion of Drug Abuse (CDT). This commission dispenses the appropriate punitive measures to the drug user where some are withdrawn if they obtain treatment against addiction. A country may be penalized for imposing such a policy to the citizens. For example, recently there was a proposal that Uruguay government would sell marijuana for personal use to the pub lic. However, the fate of this proposed law is not clear. In addition, if the law was to be passed Uruguay would be fined by the United Nations International Narcotics Control Board for going against the United Nations Single Convention of 1961. ASAM encourage exhaustive study and evaluation of distinct drug laws and programs both local and international which will enlighten the public on future strategies that aim at enhancing public health. Retrieved from http://www.asam.org/policies/state-level-proposals-to-legalize-marijuana 2012 State-Level proposals on marijuana legalization   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Several states such as Oregon, Colorado and Washington brought up proposals to legalize marijuana. For instance, Colorado Amendment 64 also known as Regulate Marijuana Like Alcohol Act, if passed the policy would legalize possession, purchase, use, transport and display certain amount of marijuana by people aged 21 years and above. The state will be responsible for regulation of marijuana sector via licensure of manufacturing, cultivation and retail stores and testing facilities. The Oregon Cannabis Tax Act if passed would bring up Oregon Cannabis Commission to regulate cultivation and sale of marijuana to people aged 21 years and above. The Washington State Initiative Measure No. 502, if passed it would regulate and license marijuana distribution, possession and production to people aged 21 years and above. Washington policy would also withdraw civil and criminal activities authorized by the policy. Upon passing these policies, would chan ge everything for example, it would change marijuana from being luxury to first time users to personal use, it will also accelerate tax collection, and commercial use and sale of marijuana. The full impact of effect of legalizing marijuana are unknown (Morgan, 2011). Conclusion   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   There is great need of considering public health consequences of a policy before proposing to make changes. There are more negative consequences linked to marijuana legalization as compared to the benefits that advocators think of. People are called upon to study various polices and programs so that they can be able to make appropriate policies that aim at improving the public health of citizens. The legalization policy will make marijuana more accessible thus increasing the risk to the youths who might fall in the trap of consuming the drugs. Marijuana legalization will also lead to an increased activities associated to marijuana such as drugged driving which leads to loss of lives, injuries and crashes. Recommendations   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   I oppose proposals to legalize use of marijuana in any of the states in America. There is more harm than good of implementing this policy. The predicted public health costs associated to marijuana legalization are high and hurt the citizens and the public policymakers. Health professionals and physicians should enlighten people on the probable effects of implementing such a policy. Marijuana is associated to a lot of negative effects and thus should not be legalized. The following should be recommended: The public should be enlightened that addiction to marijuana is a public health concern and marijuana is not safe to consume. The physicians should lead the war against legalization of marijuana. The parents should be enlightened on the dangers of making marijuana accessible to their teenage children through legalization of such a policy References Gerber, R. J. (2004). Legalizing marijuana: drug policy reform and prohibition politics. Westport, Conn.: Praeger. Morgan, K. (2011). Legalizing marijuana. Edina, MN: ABDO Pub. Co.. State-Level Proposals to Legalize Marijuana. (n.d.). State-Level Proposals to Legalize Marijuana. Retrieved May 6, 2014, from http://www.asam.org/policies/state-level-proposals-to-legalize-marijuana Source document

Accounting Firm Case Essay

Case 1: Sunrise bank recently appointed the accounting firm Smith, Godfroy, and Hannaford as the bank’s auditor. Sunrise quickly became one of Smith, Godfroy, and Hannaford’s largest clients. Subject to banking regulations, Sunrise must provide for any expected losses on notes receivable that Sunrise may not collect in full. During the course of the audit, Smith, Godfroy, and Hannaford determined that three large notes receivable of Sunrise seem questionable. Smith, Godfroy, and Hannaford discussed these loans with Susan Carter, controller of Sunrise. Carter assured the auditors that these notes were good and that issuers of these notes will be able to pay their notes after the economy improves. Smith, Godfroy and Hannaford stated that Sunrise must record a loss for a portion of these notes receivable to account for the likelihood that Sunrise may never collect their full amount. Carter objected and threatened to dismiss Smith, Godfroy, and Hannaford if the auditor demands that the bank record the loss. Smith, Godfroy, and Hannaford want to keep Sunrise as a client. In fact, Smith, Godfroy, and Hannaford were counting on the revenue from the Sunrise audit to finance an expansion of the auditing firm. See more: Defining research problem and setting objectives Essay Discussion questions: 1. What is the ethical issue in this situation? 2. What are the alternative decisions for Smith, Godfroy and Hannaford to consider? 3. Who are the stakeholders in this situation? what are the possible consequences to each stakeholder? Analyze from the following standpoints: (a) economic, (b) legal, and (c) ethical. 4. If you were the auditor, what would you do? How would you justify your decision? Case 2: St Genevieve Petroleum Company is an independent oil producer in Baton Parish, Louisiana. In February, company geologists discovered a pool of oil that tripled the company’s oil reserves. Prior to disclosing the new oil reserves to the public, St. Genevieve quietly bought most of its shares back from current shareholders. After the announcement of the discovery of new oil reserves, the company’s share price increased from $6 to $27. Discussion questions: 1. What is the ethical issue in this situation? 2. Who are the stakeholders? what are the possible consequences to each stakeholder? Analyze from the following standpoints: (a) economic, (b)Â  legal, and (c) ethical. 3. Place yourself in the role of decision maker. What decision would you have made? Case 3: Corporate Social Responsibility (CSR) is the most discussed and debated topic in today’s business environment. Various arguments have been made regarding the relationship between firms’ social responsibility and their financial performance. One view is that firms face a tradeoff between social responsibility and financial performance. The contrasting view is that CSR improves firms’ financial performance ensuing in win-win model. The Baltazar, a chemical company, is considering whether it should maintain several socially responsible actions such as establishing environmental protection procedures, making extensive charitable contributions, promoting community development plans, and maintaining plants in economically depressed locations. The CFO of Baltazar opposes such actions as he believes these actions deviate from the company’s economic goal and they will negatively affect the company’s financial performance. Discussion questions: 1. Explain your view of the social responsibility. 2. What are the potential costs (benefits) of having a low (high) level of social reasonability to a company? 3. Do you think the company should continue or dis-continue these socially responsible actions?