Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Bill to end ‘item pricing’ introduced in Michigan January 27, 2011 The Associated Press http://www.bloomberg.com/news/2011-01-27/bill-to-end-item-pricing-introduced-in-michigan.html The Latest • In his State of the State address, Governor Rick Snyder proposed repealing Michigan’s law requiring price tags on most retail items • A week later, the legislation to repeal was introduced by Republican Rep. Lisa Posthumus Lyons of Alto • The Michigan Retailers Association says the law is a hidden tax on consumers, and results in higher prices in stores • The United Food and Commercial Workers union argues that jobs would be lost in grocery stores if the law were to be repealed Outmoded Consumer Protection: The Incompatibility of Item Pricing Laws and Radio Frequency Identification October 12, 2010 By David Wyld, Southeastern Louisiana University http://www.bukisa.com/articles/372597_outmoded-consumer-protection-the-incompatibility-of-item-pricing-laws-and-radio-frequency-identification Why are there IPLs? • Item pricing laws were enacted the 1970’s and 80’s to protect consumers from being overcharged due to scanning errors • IPLs are supported by consumer advocates, and now by workers’ unions, who believe that the repeal would threaten jobs • IPLs currently exist in ten US states; Michigan’s, which includes non-food items, is one of the most stringent. Arguments Against • Retailers argue that the costs of compliance, and high fines for non-compliance, translate to increased costs for the consumer – a hidden tax. • Researchers found that prices in markets subject to IPLs were between 20-25 cents higher than prices for similar items in other markets • IPLs impede large retailers’ abilities to change prices. • There are further advances in item-pricing, like Radio Frequency Identification, that current Michigan law makes impossible to utilize. Effects of IPLs? • With the increased costs associated with IPLs, supply has decreased, leading to higher prices and lower quantities. • The Governor believes that repealing Michigan’s IPL will not only get us back to the original supply levels, but give retailers a chance to use better technology. Supply, with tax Price ($) Demand Supply, original Supply, better technology P w/ tax P* P w/ tech Q w/ tax Q* Q w/ tech Quantity Assumption: Tax Burden • But does the tax Price ($) burden really fall on the consumer? Demand • That depends on the elasticity of demand and supply curves; P w/ tax Consumer different kinds of incidence P* Producer goods have different incidence curves. •When the demand and supply curves have similar elasticities, the Q w/ tax burden is shared. Supply, with tax Supply, original Tax Q* Quantity Tax Burden Supply, with tax • When the demand curve is elastic and supply is inelastic, Price ($) Consumer incidence Supply, original Demand P w/ tax P* most of the burden goes to the producer. Producer incidence Q w/ tax Tax Q* Quantity