Business Law Question: Access the website for the Consumer Product Safety Commis
ID: 430011 • Letter: B
Question
Business Law Question:
Access the website for the Consumer Product Safety Commission (CPSC) and review the functions and responsibilities of the CPSC. Present a reasoned argument as to whether the public would be better served by a "free market" approach to product safety (for example, consumers refraining from buying products that have resulted in too many injuries or deaths), or whether the public is better-served by the existence of the CPSC. Research the following topic and post a short (250-word) response.
Explanation / Answer
The Consumer Product Safety Commission (CPSC) is a federal agency that oversees the protection of consumers of potential and obvious risks of injury or death, arising from the use or consumption of unsafe products.
The raison d'etre of this agency, and others like it worldwide, because there is an asymmetry of information between producing a good or providing a service and those who acquire, it is a fact.
The producer often takes risks potentially affecting the life and property of consumers and do not inform them, this is because involving the state to resolve this asymmetry.
In a system of free market, consumer protection is assumed for himself, the state remains outside. The idea behind this view is that the consumer handles all relevant information to make their decision and that remaining producer in the market depends on the quality and adequacy of its products. However, although this is quite true for goods of great weight within the individual budget, but the asymmetry persists, especially in goods or services that require expertise such as high technology, pharmaceuticals, health services, among others, in addition to goods of low price but high impact health as toothpaste.
On the other hand, the existence of asymmetry in the relevant information required by the consumer to make an informed decision, justify certain excesses of such agencies in the regulation, which instead of facilitating transactions, rather end up harming them. One example is the high-fat foods, which are harmful to health, the regulation has led manufacturers to place the respective nutritional tables on the label, indicating the nutritional properties of the product, however, it has gone beyond, many these foods are forbidden in schools, which has generated discomfort on the part of consumers in the light of their economic constitutional rigths.
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