• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Economics Article Analysis : Price controls amid anti-dumping probe

Extracts from this document...

Introduction

International Baccalaureate Economics Higher Level Inter Community School of Zurich Marc Fleming Extract Title: Price controls amid anti-dumping probe Source of Extract Bangkok Post www. Bangkokpost.com Extract date: Monday February 18 2002 Word Count: 447 Syllabus Links: 2 & 3 This article discusses how the Thai government implemented a price ceiling on various hot rolled still products because domestic firms were exploiting the situation of the imposed surcharges on imported steel. Price ceilings are a form of market intervention employed by governments to control price levels. They are also known maximum prices. A maximum price is a set physical limit of price, this meaning that the price of a given product may not exceed the set limit. ...read more.

Middle

The Thai government decide to take action by taxing all imported steel. The diagram below illustrates how this works and what effects are. The tax increases the price of steel imports from p1 --> p2 what this does is increase the amount domestically supplied steel from qD1 --> qD2. It can also be seen that quantity of imports has fallen from (qD1 -- qT1) to (qD2 - qT2). However, after the imposition of the tax local firms were exploiting the situation of the imposed tax. They had raised their prices close to that of the taxed imports. This makes the market price for steel higher than the equilibrium price of course hurting the consumers. ...read more.

Conclusion

This type of market intervention is not good in term of efficiency. The Thai government should of in the first place not of used a tax to end the dumping of steel, they should have placed an embargo on all imported steel which has a price lower than that of production. This way the home market would have been protected and there would have been no need for a price ceiling. I not quiet aware of the plausibility of news source the Bangkok Post for it could be bias in that it is saying that foreign companies were dumping steel in their home market, since there have been no anti-dumping investigations made yet. The Thai government may be using the supposed dumping as an excuse to shield domestic steel produces from global competition. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Markets & Managing the Economy section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Markets & Managing the Economy essays

  1. what is economics

    a fall in demand for the substitute, as this product will no longer be as price competitive * Complements, on the other hand, tend to be jointly demanded o If the price of a product increases, then it will lead to the rise in price of another product which is

  2. For a duopoly involving homogeneous products, explain and contrast a Cournot, Stackelberg and Bertrand ...

    The quantity level of output differ very much to that of price setting led equilibrium quantities by Bertrand. Bertrand argued that duopolists independently and simultaneously set prices, p1 and p2. As there is homogeneous products, consumers will always choose the firm setting the lowest price.

  1. In economics we refer to these two acts as tax evasion and tax avoidance. ...

    This will bring output to shrink to OC and price rise to BD. The unit tax magnitude is shown by EH. As regards to tax revenue this would amount to area EHGF. Similarly to the perfectly competitive case, changes in output, price and revenue depend on the elasticities of demand and supply.

  2. Is the Government to Blame for Higher Petrol Prices?

    The simple answer is yes and no. Yes the government taxation takes up the highest proportion of the cost of petrol at the pumps and yes tax on petrol has increased predominantly year on year (mainly due to VAT after 2000).

  1. marketing mix analysis

    An example of this is special discounted prices at, for instance, GAP, NEXTetc or Coca ColaandPepsiwheredifferent prices are set in different geographical areas considering the difference in patterns of usage as well as varying advertisement costs. Placement Placement under marketing mix involves all company activities that make the product available to the targeted customer (Kotler and Armstrong, 2004).

  2. Micro economics environment - Government intervention

    it is felt that fairness may be ignored therefore the government intervene e.g. monopoly There is also reason for them not to intervene such as there are two main government parties, the labour party and then there is the conservative's party.

  1. What Are The Effects Of Tescos Oligopolistic Market Structure, On Both Consumers And Producers?

    A negative effect of oligopolies in general, is the increase in the concentration of wealth and income. This is where a company increases its share in the market through internal growth and taking over other firms. Tesco definitely falls into this category as can be seen from figure 12 (left.)

  2. Tata steel SWOT

    Ethical and Cultural, Tata Steel has had impeccable record for corporate governance. It has set the benchmark in global corporate governance principles of transparency, accountability and equity for others to follow; it also has been consistently receiving prestigious awards at both the national and the international arena.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work