Chapter 3: Government and The Consumer

Competition in the marketplace provides an opportunity to encourage the production of safer products because companies that earn reputations for making unsafe products face retribution from consumers.
Consumer products are subject to regulation by a great variety of government agencies. The Consumer Product Safety Commission (CPSC) has the broadest and most general responsibility.
The CPSC truly has a board mandate:

• To work with consumers and business to foster voluntary standards for product safety.
• To set and enforce mandatory standards.
• To ban unsafe products when a safety standard is not considered to be abequate protection for the public.
• To order firms to give public notice of a subatantial hazard assciated with a product and to repair, replace, or refund the price of a product that presents a substantial hazard.
• To provide information to help consumers select and use products safety.

The Impact on Consumers - Benefits and Costs. Generate substantial costs, which will be brone ulitimately by the consumer in the form of higher prices or reduced variety of products.

• What is an acceptable risk?-Some government regulations aim at eliminating all hazards
• Regulation and Consumers-The regulation of consumer products by the Food and Drug Adiministration (FDA) procides cogent examples of the costs and benefits that flow to the consumer from governmental involvement.
• Product Liability and the Courts-Under the U,S, legal system, the promiart responsibility for product safety is borne by the manufacturers.

 Government regulates a great variety of consumer products and in the process influences business decision making in many ways. At times, some of the agencies regulating consumer products rely on the information approach. On occasion, providing pertinent product information can benefit consumers more quickly than regulation. Potentially, market competition can play a key role in reducing injuries from the products consumers use.

Source:Business and Government in the Global Marketplace (Seventh edition Murrary L. Weidenbaum)