Table of Contents 1.0 INTRODUCTION TO TOBACCO CURRENT MARKET IN SRI LANKA 2 2.0 SRI LANKAN TOBACCO MARKET STRUCTURE ANALYSIS 3 2.1 THE PRIVATE AND SOCIAL COSTS OF SMOKING 5 2.1.1 Private Costs and Social Costs of Smoking 5 2.1.2 Explaining the Market Failure 5 3.0 TAXATION AND REGULATIONS 7 3.1 COMMAND AND CONTROL OF THE INDUSTRY 7 3.2 INDIRECT TAXES AND PRICE ELASTICITY OF DEMAND 9 4.0 PROBLEMS AND FUTURE FORECAST 10 4.1 PROBLEMS 10 4.2 FUTURE FORECAST 11 5.0 RECOMMENDATIONS 12 REFERENCES 14
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to correct them. Here are five way in which the market can fail • Externalities • Asymmetric information • Monopoly market • Public Goods • Factor immobility Externalities: “The social optimum output or level of consumption diverges from the private optimum.” (tutor2u‚n/a‚n/a) Externalities are external cost and external benefits which occur due to economic activity. However externalities do not involve the buyer or the seller in the purchase of a good or service
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In what sense is this a ‘winner-takes-all’ industry? A “winner-takes-all” market refers to a market that is dominated by a single supplier and is subject to significant network externalities. Network externality in simplest terms is the value of a product to an individual customer that is affected and dependant on the number of other users of that product. Thoroughly assessing the case study we came up with the conclusion that the notion behind the market being considered a “winner-takes-all” market
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Market failure happens – a situation in which economic efficiency has not been achieved because of imperfections in the market mechanism. These market failures consists of ; Externalities‚ public goods‚ merit goods‚ business fluctuations‚ legal system‚ re distribution of income..as clearly explained below. Business fluctuations are the ups and downs in overall business activity as evidenced by changes in national income‚ employment and prices. It is normal that a country passes through a recession
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some benefits. The total cost of smoking not only effects smokers‚ but society as well. The externalities from smoking are both negative and positive. Society suffers the negative externalities by the smell and health. Second hand smoke is just as bad as smoking itself. Also smoking is kind of frowned upon in society today. Many people just straight up don’t like smokers. The positive externalities play a significant economic role in society. The tobacco industry generates a great deal of
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Barron OV et al‚ 2011 Climate change impact on groundwater resources in Australia Cave‚ D et al.‚ 2011‚ Economics for the Real World‚ Third edn‚ Pearson Australia‚ Melbourne. Dahlberg‚ E n.d. Tradable Pollution Permits as a Remedy for the Negative Externality‚ Stanford‚ accessed 1 May 2013‚ Kirkwood‚ L et al.‚ 2009‚ Economics for the Real World‚ Second Edition edn‚ Pearson Heinemann‚ Melbourne. Plazinska‚ A‚ 2007‚ ‘Understanding Groundwater’‚ SCIENCE for DECISION MAKERS‚ p. 1‚ accessed 12 May 2013‚
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Grains are very important for a healthy diet. It is commonly consumed by people and is used for many foods. In the article the supply of grains‚ wheats‚ and soybeans were destroyed by a drought near the Black sea. So the agribusiness division would sell and transport these grains and oilseeds to those who demand it. Of course the demand for these grains from this division would increase because those who were in need of those crops near the Black Sea would turn to the imports of these grain. When
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a public good‚ they argued back with all of the ways are society benefits from the public education system. This helped me realize that while education is not a public good‚ it does pose a large number of positive externalities. While there are a large number of positive externalities that are created by education‚ the two leading examples that are commonly debated over are civic engagement and democracy‚ and an educated work force. Many make the argument that in order to sustain a democratic society
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MT445- 02: Managerial Economics Unit 7 Project Professor Hernan Verlarde Chapter 15 2. (Government Regulation) What three types of government policies are used to alter or control firm behavior? Determine which type of regulation is used for each of the following: a. Preventing a merger that the government believes would lessen competition b. The activities of the Food and Drug Administration c. Regulation of fares charged by a municipal bus company d. Occupational safety
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The U.S. Economy: Private and Public Sectors ANSWERS TO END-OF-CHAPTER QUESTIONS 4-1 4-2 4-3 Distinguish between the functional and personal distribution of income. Which is being referred to in each of the following statements? “The combined share of wage income and proprietary income has remained remarkably stable at about 80 percent since the Second World War.” “The relative income of the richest households is higher today than in 1970.” The functional distribution of income shows
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