ACT 3060 Lecture Notes - False Advertising, Dietary Supplement, Economic Surplus
Document Summary
Minh hoang, carolyn ku, andrew lam, miguel perez. For me (as susan), reputation with the general public and potentially generated revenue is at stake. My job, or rather, a seemingly imminent promotion, would be at stake depending on the outcomes. The company"s image is at stake due to the fact that if they endorse the use of a product that comes with such a negative side effect, they would be under fire. Capturing the product"s use in the alternative market would generate up to a 50% increase in sales. Making this move also captures the uncaptured consumer surplus. This move also takes advantage of the spare capacity the production line of the product has, thus maximizing producer surplus as well. On the other hand, there is an argument to push for the product seeing as so many people have endorsed and mentioned the product by name as a means to kick start a diet.
