Term paper

ANALYSIS OF COLBY COSH'S ARTICLE ON MICROECONOMIC ISSUES Name Course Code and Title Date Introduction In the article “Why is Price-Fixing a Crime For Bread, But Not For Dairy?” Cosh offers a practical approach to studying current microeconomic problems, particularly price discrimination, the strategic behavior of oligopolies, and wrong decisions in international trade. The author discusses price-fixing laws in Canada’s dairy and bread industries. It compares and contrasts the different legal and economic approaches adopted by the two sectors to price-fixing and the factors that push consumers to select products based on quality and cost. Cosh shares valuable information regarding the complexities of current economic situations and their consequences for the efficiency of our markets, consumer welfare, and strategic decisions. Its central focus is market structure, government regulation, and international trade agreements. To better understand the ideas Cosh is passing around, concepts of oligopoly, price discrimination, game theory, and global commerce are critical. The ultimate objective of the analysis is to improve understanding of contemporary microeconomic issues and how these determine the outcome of economic events in practice.[Edgar Browning and Mark Zupan, Microeconomics: Theory and Applications. John Wiley, 2020.] [Colby Cosh, "Why is Price-Fixing a Crime For Bread, But Not For Dairy?" National Post, 2022.] Oligopoly and Price Fixing The Canadian supermarket industry, as depicted in Colby Cosh's article, forms the perfect mirror for the principles of oligopoly and price fixing. Cosh noted the number of crucial supermarket chains that cooperated in setting bread pricing, demonstrating some oligopoly behavior. One of the cases that Cosh discusses is where a class-action suit was granted against big Canadian grocery stores such as Loblaws, rejecting the idea of price-fixing. This action that a few big companies have undertaken together makes the market uneven, which results in excessive pricing and lowers consumer welfare. These supermarket chains dominate the market because they strategically work in a way that results in price control, thus limiting consumer selection and flooring prices.[Colby Cosh, "Why is Price-Fixing a Crime For Bread, But Not For Dairy?" National Post, 2022.] Consequently, the paper argues that price-fixing has inevitable consequences in an oligopolistic market structure. In Cosh's words, the public's reaction to the bread price-fixing case was subdued, showing that people might not have cared how much it cost. This uncovering agrees with the argument of oligopoly, which presumes that market participants with high concentrations can set pricing without entering intense competition. The oligopolistic structure of the grocery market arises from anti-competitive business tactics, including price-fixing, with little regard for consumer welfare where such effects are potential.[Edgar Browning and Mark Zupan, Microeconomics: Theory and Applications. John Wiley, 2020.] Cosh’s analysis also looks at the implications of price-fixing on the bread sector, highlighting the necessity of imposing legal proceedings to hinder the process. Authorities plan to eliminate unfair behavior by grocers and maintain the basic features of economic competition by charging those who fix prices. This emphasizes the essence of regulatory surveillance in eliminating the possible disadvantageous effects of oligopoly conduct on consumer welfare and market efficiency. One of the interesting examples illustrating the difficulties of regulating the markets under specific concentrated industries is Cosh’s study of price-fixing within the oligopolistic setting. Price Discrimination and Quality Discrimination Cosh's article examines the distinct methods of price-fixing in the bread and dairy sectors, particularly highlighting the distinctions between price and quality discrimination. In Canada, the grocers in control of bread prices face legal consequences, whereas supply management programs support price gouging in the dairy industry. These ...