Submitted by: Submitted by bling8
Views: 205
Words: 1713
Pages: 7
Category: Business and Industry
Date Submitted: 10/04/2013 02:41 PM
Free market capitalism is a great choice for the world economy. It allows companies to compete with each other to earn the business of the consumer. It also allows the consumer the option of where they purchase their products from. By having a free market system you have the most balanced approach to satisfying both company and consumer needs. It allows the consumer to receive products at a price that they feel is fair and a company is able to maximize its own profit margins by making a product that meets consumer demands and can be produced at the lowest possible cost to them. Not having a free market system in place leads to a wider disparity in between the rich and the poor and puts a much larger strain on the poor people that are already struggling to make ends meet.
China is the most populous country in the world and because of this has a large demand for consumer goods; one of these goods is infant formula. The Chinese government is investigating a report about price fixing by some large international companies that are providing the country with infant formula. This is a way for competing companies to work together, illegally, to increase their profit margin by increasing the prices on their products and having the, so called, “competition” raise their process in a similar manner. China’s National Development and Reform Commission (NRDC) has been investigating the reports of this price fixing. In a statement released by an anonymous NRDC official they stated, “Based on the evidence obtained, these companies are involved in price control with distributors and retailers, aimed at excluding fair market competition” (Riley). As stated in the quote, they are directly opposing a free market system by working in coalition with their competitors to increase their profit margins at a larger cost to the consumer. By doing this they have put a bigger strain on the world market as well. The Chinese have begun to look to other markets to purchase their infant formula...