Essay on History of the Prison System - 3187 Words

Prison is an institution for the confinement of persons convicted of criminal offenses. Throughout history, most societies have built places in which to hold persons accused of criminal acts pending some form of trial. The idea of confining persons after a trial as punishment for their crimes is relatively new. During the 15th century in Europe, the penalties for crimes were some form of corporal punishment like whippings for less serious crimes and execution or enslavement for more serious offenses. In early 16th century England, vagrants and petty offenders were committed to correctional institutions known as workhouses. During the reign of Queen Elizabeth I, the government transported convicted felons to the†¦show more content†¦The first system began in Auburn State Prison in New York in 1817. Prisoners worked together in total silence during the day, but were housed separately at night. Strict discipline was enforced, and violators were subject to severe reprisals. The second model, the Pennsylvania system, begun in 1829 in the Eastern State Penitentiary at Cherry Hill, was based on solitary confinement for convicts by day and night. There was a lot of debate about the two systems. People who favored the Pennsylvania model focused on its hope of rehabilitation, the theory be ing that a felon alone in a cell with only a Bible to read would become penitent. This is where the term penitentiary came from. The Auburn system was criticized as being virtual slavery, because prisoners were often put to work for private entrepreneurs who had contracted with the state for their labor. Prisoners of the system were never paid leaving a good profit for the business owners and the state. People who believed in the Auburn system said that the idleness of the prisoners in the Cherry Hill penitentiary sometimes caused madness. The activity of the prisoners and the profits from their labor meant the state didnt have to finance the prison. Most states adopted the Auburn approach. European countries adopted the Pennsylvania model. Private business had always been opposed to the industrial Auburn model prison.Show MoreRelatedHistory Of The Prison System1067 Words   |  5 PagesThe history of the prison system in the US is very extensive and encompasses nine different eras which include the Penitentiary era, Mass Prison, Reformatory, Industrial, Punitive, Treatment, Community-based, Warehousing, and the Just-desert era. Each era had its own strength and weaknesses that influenced each subsequent era that came after. the idea of a prison system came about from the colonist desire for a more humane method of dealing with criminal offenders. It was a key move away from corporalRead MoreAmerican Prison System Essay945 Words   |  4 PagesAmerican Prison Systems Introduction In many countries national prisons are operated and supplemented by provinces and state counterparts. Prisoners are held in prisons and jails throughout the country and globally convicted of various crimes and offenses. The nature of the offense determines where the prisoner is held and the lengths of times. There are institutions that vary in level of security in both the state and federal prison system. However, the majority of prisoners areRead MorePurpose and History Paper783 Words   |  4 Pages* Running Head: Purpose and History Paper * * * * * * * * * * Purpose and History Paper * Joseph Ford * CJA/234 * August 20, 2012 Robert Major * * * Prison development dates all the way back to the early Roman times and even then there were forms of punishment for criminals. In today’s society we have come a long way from the Roman times with the way prisons are ran and punishments are enforced. With this developmentRead MorePenitentiary Ideal and the American Prisons1292 Words   |  5 Pagesï » ¿Penitentiary Ideal and the American Prisons: Prisons have developed to become famous institutions in the modern society to an extent that its difficult to remember that these institutions have a history of slightly over two centuries. Prisons emerged in Europe first before the United States as a product of the dual transformation that established the basis for contemporary capitalism. The institutions are famous because they are an integral part of the criminal justice system that house condemned and convictedRead MoreCritical Review On Angela Davis873 Words   |  4 Pagesbeen focusing on fighting against the prison system. She is the founder of Critical Resistance, a national organization about prison industrial complex. Her book Are prisons obsolete? explores prison abolition. Are prisons obsolete? is published by Seven Stories Press in 2003. In Are prisons obsolete? Davis explores and critiques the current prison system. She researches and explains slavery, gender structure, the prison industrial complex . She argues th at prison are undemocratic because they areRead MoreHistory and Purposes of Prisons884 Words   |  4 PagesHistory and Purpose of Penitentiaries Jeffrey Brown CJA234 July 7,2012 George Chavarria History and Purpose of Penitentiaries Crime has had an impact on society for years, and will continue to do so well into the future. The presence of criminals and criminal acts proved that there was and all ways will be a need for penitentiaries. Correctional facilities no matter if they are prisons, jails, or penitentiaries are all part of the criminal justice system. Their overall goal and objectiveRead MorePurpose and History of Punishment785 Words   |  4 PagesPurpose and History of Punishment The American society of punishment has been heavily based on British law, which has in turn grown from Western capital punishment and personal retribution. In the seventh century A.D. leaders in government have begun to realize that crimes harmed society. The government started becoming more involved in controlling crimes and punishment for the crimes being committed. To protect the citizens the leaders of the governing body assembled a set of laws that were passedRead MorePurpose and History Paper865 Words   |  4 PagesPurpose and History Norris R. Billingsley CJA 234 October 8, 2013 Yolonda Johnson Purpose and History In reference to the history of punishment for crimes, which date back as far as 450 B.C., some of the earliest methods of punishment are replaced by more efficient and humane methods of punishments or corrections. Punishments back then were harsher, brutal, and inhumane because people strongly believed in the retributive approach to crimes committed by individuals. Punishments such as whippingsRead MorePrisons : Prisons And Prisons1332 Words   |  6 PagesJails and Prisons Comparison Paper Throughout history, the general public often misinterprets the difference between jails and prisons. For long confinement terms, jails are not used to hold sentenced offenders. However, jails are the oldest of the correctional components. According to Seiter (2011), jails were initiated prior to halfway houses, parole, probation, or prisons. Also, jails hold various offenders such as those being held administratively for a criminal justice agency, waiting to transferRead MoreThe Prison System1048 Words   |  5 PagesFinal Exam Essay Question #2 Question: Discuss the history of the prison system in the United States. Be sure to identify the various stages that the American prison system has gone through. Also identify what problems were present with each stage as you see them. Response: American prison system incarceration was not officially used as the main form of punishment in United States (U.S.) until around the 1800’s. Before that time criminals were mainly punished by public shaming, which involved punishments

Supplier Relationships a Strategic Initiative Free Essays

string(35) " and networked computing are here\." Supplier Relationships: A Strategic Initiative Jagdish N. Sheth Goizueta Business School Emory University Arun Sharma University of Miami Jagdish N. Sheth is Charles H. We will write a custom essay sample on Supplier Relationships: a Strategic Initiative or any similar topic only for you Order Now Kellstadt Professor of Marketing, Emory Business School, Emory University and Arun Sharma is Associate Professor of Marketing, University of Miami. This paper extends research published by the authors in Industrial Marketing Management (March 1997). Please address correspondence to Arun Sharma, Department of Marketing, University of Miami, P. O. Box 248147, Coral Gables FL 33124, Telephone: (305) 284 1770, FAX: (305) 284 5326. Supplier Relationships: A Strategic Initiative* Abstract In an increasing competitive marketplace, firms are seeking new methods of enhancing competitive advantage. Today, purchasing is becoming a strategic function and a key factor in competitive positioning. This paper suggests that effective relationship with suppliers will provide firms with next-generational competitive advantage. With consolidation of firms within industries, continuos product evolution and constant pressure on costs, supplier relationships will become more critical in the future. This paper discusses the emergence of supplier relationships, and how this shift toward supplier relationships has and will change the role, processes and strategies of firms. Although purchasing has strategic importance within a firm, good relationships between customers and suppliers are elusive. Firms, therefore, need to emphasize aspects that will enhance supplier relationships. * This paper extends research published by the authors in Industrial Marketing Management (March 1997). Supplier Relationships: A Strategic Initiative Introduction Firms are facing increasingly competitive environments characterized by continuos pressure on costs, large global players, continuously evolving products, customer fragmentation and emerging technologies. To ensure success, firms realize that they cannot be experts in all businesses and are concentrating on their core competencies. As an example, Westinghouse is selling its power and defense lines to concentrate on the broadcasting business. To enhance their performance in non-core competency areas, companies are reevaluating business relationships so as to form closer relationships with strategic suppliers [1, 2, 3]. Firms have realized that collaborative business relationships improve a firm’s ability to respond to the new business environment by allowing them to focus on their core businesses and reduce costs in business processes. In an earlier paper, we had suggested that the source of next-generational competitive advantage will be collaborative relationships that firms have with their suppliers [4]. We suggested four reasons for this phenomena. First, marketers or sellers are driving this change as firms have started identifying and catering to the needs of specific customers. Thus, having a relationship with suppliers will enable firms to receive better service and therefore be more efficient in procurement. Second, firms recognize that supplier relationships will allow them to be more effective. It is easier to implement strategies such as quality platforms, if firms have relationships with their suppliers. Third, there are enabling technologies that allow firms to select their best customers and suppliers. Computer programs allow firms to calculate profitability Page 2 associated with each customer or supplier. Finally, competition and the growth of alliances are forcing firms to develop better supplier relationships to maintain a competitive edge. The purpose of this paper is to emphasize that supplier partnerships will provide a strategic advantage to firms. This paper identifies the benefits of supplier partnerships and provides guidelines for future supplier partnering. Shift in Organizational Strategy The reason for the emerging emphasis on supplier relationships is the shift in organizational buying strategies [4]. Organizational purchasing strategies have been dramatically changing for four reasons (please see Figure 1). First, global competitiveness had made firms realize the competitive advantages of creating and managing supply chain relationships. Second, emergence of the Total Quality Management philosophy has encouraged â€Å"reverse marketing† starting with external customers and moving backward into procurement processes. For example, Demand Driven Manufacturing or flexible manufacturing and operations have been instituted in order to serve the diversity of demand with respect to form, place and time value to customers. The role of suppliers is critical in this regard. Third, industry restructuring through mergers, acquisitions and alliances on a global basis has reorganized the procurement function from a decentralized administrative function to a centralized strategic function. This is further intensified by outsourcing many support functions such as data processing, and human resources. Finally, uses of information technologies have restructured the buying philosophy, processes and platforms by allowing firms to share market information and use market information to schedule design and manufacturing of products better. Page 3 Fundamentally, the consequence of changing paradigms of organizational strategy is likely to result in a two dimensional shift as shown in Figure 2. Organizational purchasing strategy shifts from a transaction oriented to a relational oriented philosophy, and from a decentralized domestic sourcing to a centralized global sourcing process. Relationship with Suppliers As stated earlier, we suggest that developing relationship with suppliers will be critical for the effective functioning of firms. This trend is reflected in Table 1 that shows that large firms have substantially reduced their number of suppliers. This trend also suggests that some suppliers would be exclusive to firms. The primary reasons are that corporations are becoming leaner. The procurement function is becoming more centralized while the profit-and-loss (P) responsibility of firms is becoming less centralized. Business-unit heads are raising more questions about the way things are bought. And as vertically integrated companies – those that have complete internal capabilities and are self-sufficient – become relics and outsourcing of operations become a reality, more opportunities to partner with suppliers will arise. Taking advantage of these opportunities is increasingly important for several reasons: †¢ Declining market prices. Nobody expects prices to rise anymore. There is going to be a tighter squeeze on the margins of customer companies. They would like to get that margin reestablished by working with suppliers. †¢ Rising competitive intensity. With the restructuring of the world economy, the formation of the World Trade Organization, and greater economic integration within and between regions, global and regional consolidation is clearly taking place and resulting in greater Page 4 competition. Advanced technology enablers. Electronic commerce and networked computing are here. You read "Supplier Relationships: a Strategic Initiative" in category "Papers" Dramatically reduced cycle times are becoming an ordinary achievement. These require partnering with suppliers. †¢ Reverse marketing strategies. The traditional process flow – from R and sourcing to manufacturing, sal es and service – is becoming a thing of the past. Today, market-focused organizations are organizing into reverse marketing – starting with the end users. Partnering with suppliers is critical to this strategy. †¢ Strategic positioning. In the past, companies partnered primarily for operational efficiency (i. . , just-in-time procedures or zero-inventory models). Today, intense competition is coming from existing rivals, new entrants and the threat of substitutes. Partnering with suppliers is an increasingly important way of minimizing the competition’s negative impact on an industry. Example of Companies Benefitting from Supplier Relationships The major research regarding the advantage of supplier relationships comes from a study of the Japanese automotive component industry [5]. They found that the average length of the relationship between suppliers and buyers was 22 years. In addition, the major customer bought about half the output of the supplier firm. About 26% of the supplier’s development effort was devoted to a single customer. Competition was restricted to 2-4 other suppliers. Finally, the quality of delivered product was very good. The data would suggest that supplier relationship enhanced the design efforts of the buying company and reduced uncertainty and costs for the Page 5 supplier company. Eastman Kodak, Ford Motor Company, Levi Strauss, DuPont , McKesson and Bose corporation demonstrate that some savings can be achieved by supplier relationships [2]. These firms as well as examples of other firms using specific tactics to benefit from successful relationships are discussed next: Eastman Kodak Company: Eastman Kodak Company has outsourced its data and information processing system to IBM. Kodak has achieved substantial cost savings through reducing personnel, assets and capital expenditures in an area that is not its area of core competency. This shift toward asking data processing and systems management consultants to manage the information and data processing of a firm has accelerated as major firms such as Xerox and Ryder have outsourced their internal data processing systems. Ford Motor Company: Ford formed a relationship with one of their own clutch suppliers. Ford examined the production process of their supplier and was able to reduce the cost of the clutch by 20% benefitting both Ford and the clutch supplier. Similarly, based on their past experience with Donnelly, Honda picked Donnelly as an exterior mirror supplier, although Donnelly had no experience in the area [3]. Honda sent its engineers into Donnelly’s plant, and Honda and Donnelly engineers reorganized the plant and re engineered the product process. Sales are expected to be $60 million in 1997 and costs are expected to decline 2% annually benefitting both Honda and Donnelly. JC Penny and Levi Strauss: JC Penny and Levi Strauss are linked with an electronic Data Page 6 interchange (EDI) that allows Levi Strauss to obtain sales data. Levi Strauss obtains data on the exact size of jeans sold in individual stores. This data allows Levi Strauss to better plan the production process as well as better control inventory and delivery. This saving leads to a reduction in costs and prices benefitting both JC Penny and Levi Strauss. DuPont: Dupont has reduced the costs of each purchase transaction in the maintenance and repair supplies division from $120 to $16 by working with a smaller number of suppliers. DuPont selected one distributor in each region for a supplier relationship. They then implemented a paperless order, receipt and payment process. In addition to decreased costs of transaction, inventory at the maintenance and repair facilities were reduced by 50%. McKesson Drug Company: McKesson a major drug distributor, developed a relationship with Johnson and Johnson, one of their major suppliers. Through a joint computer system development effort, both firms receive data on inventory, point of sale, demand, and customer information. This has led to Johnson and Johnson providing better service to McKesson increasing the level of service that McKesson provides to its customers. Due to the success of the relationship, Johnson and Johnson has turned over a million dollars worth of business to McKesson. Bose Corporation: Bose corporation has attempted to eliminate both purchasers and salespeople by bringing suppliers into the manufacturing process. Suppliers have access to Bose’s data, employees and processes. They work with Bose’s engineers on present and future products. The Page 7 reduction in personnel reduces costs for both sides, and a direct contact between the user and producer enhances quality and innovation. Establishing and Maintaining Supplier Relationships Wilson [6] suggests that the majority of alliances fail. We feel that most of the problems are associated with the selection and maintaining of supplier relationships. We present research finding from academic research, USGAO [2] and our own experiences. In order to establish relationships, we suggest that firms be very selective in their criteria. In addition to the normal criteria of competency and quality, we suggest the following additional factors be taken into consideration: †¢ Trust and Commitment to Long-term Goals. Both suppliers and buyers need to demonstrate trust and commitment toward a long-term vision. Trust and commitment have been shown to be the major predictors of successful relationships. †¢ Mutual Benefit. The relationship should be of benefit to both the buyer and the seller. If the relationship has one-sided benefits, the relationship will not last. †¢ Top Management Support. Most successful relationships are associated with support from the top managers of a firm. As examples, the success of Walmart and Corning in forming relationships is because their CEOs have supported supplier relationships. Also, DuPont and Roadway Express have formed an Executive Board that meets at both companies to enhance their relationship [2]. †¢ Compatible Organizational Culture. The culture of firms should be compatible. This Page 8 uggests that they share common values and share common reward systems. A major relationship initiative between two telecommunication firms did not work because they did not share a common work philosophy. One firm was very intense, whereas the other firm was laid back. The relationship dissolved in six months. †¢ Sharing of Information. Relationships require sharing of information. The benefits of relationships arise from reducing the uncertainty associated with transaction oriented exchanges. Information increases certainty and reduces needless interaction. As an example, Bailey Controls, a manufacturer of control systems shares data with two of its main electronic distributors that has allowed Bailey to reduce inventory and costs [3]. †¢ Strong and Open Communications. Strong and open communications reduces misunderstanding and enhances the quality of relationships. Maintaining Successful Relationships The following aspects are regarded as important for the successful maintenance of relationships. †¢ Simple and Flexible Contract. Simple and flexible contracts enhance relationships as they are used as guides rather than specifying all contingencies. For example, when Kodak outsourced their computer support services to IBM, they used an eleven-page contract [2]. In contrast, typically simple business contracts run to about 30 pages. †¢ Intensive Management Involvement. Cross functional teams from both the supplier and buyer organizations that meet periodically to enhance their relationships. For example, Ford uses salespeople to provide suppliers with consumer feedback [2]. Page 9 †¢ Periodic Performance Monitoring. We have found that performance monitoring is critical for relationships. Suppliers also appreciate a formal performance evaluation method. As an example, Motorola evaluates and generates a score card for all of its suppliers [3]. The supplier’s next order is based on the supplier’s previous performance. Suppliers appreciate this knowledge and compete better. †¢ Internal Controls. It is intuitive but companies need to protect access and distribution of confidential information with rigorous internal controls. †¢ Problem Solving Procedures. Companies need to establish problem solving procedures that reduce conflicts or prevent conflicts. One of the simplest forms is frequent communication at all levels of the customer and supplier organization. Organizational Changes Need to Establish Supplier Relationships As stated earlier, as we traverse from a transaction and domestic orientation to a relationship and global orientation, firms will need to emphasize the development of relationship with suppliers. This emphasis of a relationship orientation toward suppliers will lead to an expertise in many aspects of business buying. These areas are highlighted in Figure 3, raised in our earlier paper [4] and discussed next. 1. Supplier as a Customer. As discussed earlier, there will be a thrust toward developing and maintaining relationship with customers. However, firms’ understanding in this area is very limited. Firms will need to develop commitment, trust and cooperation with their suppliers. Firms will need to invest in mutual goals, interdependence, structural bonds, adaptation, non Page 10 retrievable assets, shared technology and social bonds to ensure successful relationships [6]. 2. Cross-Functional Supplier Teams. Marketers have used interdisciplinary teams to contact and maintain relationships with their customers. As individual suppliers relationships become more important we expect a similar thrust toward cross-functional teams that are dedicated or focused on their key suppliers. The importance of individual suppliers is expected to increase because of the emergence of sourcing on a global and relational basis with a few key suppliers. Firms will need to change goals, reward structure and group norms of the purchasing function. 3. Does Partnering Pay? Firms will need to monitor the return on investment in establishing relationships with suppliers. Therefore, firms will need to develop a performance metric that analytically quantifies supplier relationship equity. We feel that supplier partnering with smaller share suppliers will not be economical. The cost-benefit analysis of supplier relationships should result in increased supplier selectivity. 4. Supply Experience Curves. Managing supplier relationships will not be an easy task. The task of managing relationships on a global basis will be more complex and not analogous to domestic supplier management as most business customers have realized. Therefore, in industries where supply function is a key strategic advantage, companies need to focus on creating core competency in supply side management and develop sharper experience curves. Page 11 5. Hub and Spokes Organization. We expect organizations to reduce the number of uppliers in each product or service category. In addition, re engineering has forced firms to out source internal activities. We expect the results of these two trends to lead to a hub and spoke organization in which one or two suppliers in each product or service category are the spokes and the procurement organization becomes the hub on a global basis. 6. Bo nding with Suppliers. Marketers, specifically those that practice relationship marketing have learned to bond with their customers. Bonding relates to the empathy that the marketing organizations feel toward their customer groups. With an increasing trend toward creating, managing, and enhancing ongoing relationships with suppliers on a global basis, organizations will have to invest in supplier bonding processes and philosophies. 7. Global Sourcing. We expect global sourcing to be a source of strategic advantage. While several global enterprises, especially in the automotive, high technology and the aerospace industries are establishing processes and platforms, it is still at an infancy stage of practice in other industries. Firms will have to develop expertise in global sourcing strategies as well as global logistics. . Cross-Culture Values. Firms will need to be more aware of cross-cultural values. These values may be in conflict with the firm’s present value system. As an example, firms in the US are accused of focusing on short-term profitability whereas firms in Japan are concerned about long-term positioning. Similarly, in some cultures, reciprocity is declared illegal and unethical Page 12 where as in other cultures it is the preferred way of doing business. What is considered as an agency fee in one country is recognized as a bribe, subject to prosecution under the anticorruption laws. Similarly, doing business with family members and politically connected individuals are presumed to provide a sense of trust and commitment in some cultures whereas it is considered as nepotism and unethical behavior in others. 9. Cross-National Rules. Firms will also have to learn about cross national rules. Specifically, the two tier regulations (one for domestic and the other for foreign enterprises) are common with respect to ownership, management control, and co-production practices in countries such as China. With the rise of nationalism in recent years, this has become a key issue for global enterprises such as McDonald’s, Coca-Cola, General Electric, and Enron, especially as they expand their market scope and supply scope in large emerging nations such as India, China, and Indonesia. 10. Services Procurement. As organizations out source more and more internal services, and as suppliers engage in providing value-added services to their customers, firms need to better understand and research services procurement. Additionally, as most advanced countries are services economies, services procurement will rise in prominence. Conclusions The paper examined the reasons for the emergence supplier relations as source of Page 13 competitive advantage. The paper discusses successful relationships, rules for developing relationships and concludes with organizational strategies that will enhance supplier relationships. Page 14 References 1. Napolitano, Lisa, Customer-Supplier Partnering; A Strategy Whose Time has Come, Journal of Personal Selling and Sales Management, 4 (Fall), 1-8 (1997). United States General Accounting Office, Partnerships: Customer-Supplier Relationships can be Improved through Partnering, Report Number 94-173, Washington, D. C. (1994). Magnet, Myron, The New Golden Rule of Business, Fortune, February 21, 60-64 (1994). Sheth, Jagdish N. , and Arun Sharma, Supplier Relationships: Emerging Issues and Challenges, Industrial Marketing Management, 26 (2), 91-100 (1997). Wasti, S Nazli, Jeffrey K. Liker, Risky business or competitive power? Supplier involvement in Japanese product design, Journal of Product Innovation Management, 14 (September), 337-55 (1997). Wilson, David T. , An Integrated Model of Buyer Seller Relationships, Journal of the Academy of Marketing Science, 23, 4, 335-45, (1995). Emshwiller, John R. Suppliers Struggle to Improve Quality as Big Firms Slash their Vendor Roles, Wall Street Journal, August 16, B1, (1991). 2. 3. 4. 5. 6. 7. Page 15 Table 1 Reduction in the Number of Suppliers Company Number of Suppliers Current Previous 5,000 10,000 9,000 10,000 1,800 22,000 520 7,500 Percentage Change 90. 00% 70. 00% 66. 66% 45. 00% 44. 44% 36. 36% 26. 92% 20. 00% Xerox Motorola Digital Equipment Ge neral Motors Ford Motor Texas Instruments Rainbird Allied-Signal Aerospace 500 3,000 3,000 5,500 1,000 14,000 380 6,000 Source: Emshwiller [7]. Page 16 Figure 1 Changing Paradigm of Organizational Purchasing Strategy Global Competitiveness Technology Enablers Changing Paradigms of Procurement TQM Philosophy Industry Restructuring Page 17 Figure 2 Shift in Organizational Purchasing Strategy Global Sourcing Changing Paradigms of Procurement Transaction Oriented Relationship Oriented Industry Restructuring Domestic Sourcing Page 18 Figure 3 Emerging Areas of Expertise in Supplier Relationships Service Procurement Supplier as a Customer Cross Functional Supplier Teams Cross-National Rules Partnering Cross Cultural Values Supply Experience Curve Global Sourcing Bonding with Suppliers Hub and Spoke Organization Page 19 How to cite Supplier Relationships: a Strategic Initiative, Papers

Economics Principles - Problems - and Policies

Question: Discuss about the Economics for Principles, Problems, and Policies. Answer: Introduction: The Bagels and Cream cheese are complementary goods. As demand for bagels rises, the demand for cream cheese will also increase and when demand for bagels falls the demand for cream cheese also declines. As the equilibrium price of cream cheese has risen the equilibrium quantity of bagels has fallen. This is because, as the price rises, the demand for cream cheese has fallen. Since, cheese cream and bagels are complementary goods, the demand for bagels will decline as well. The equilibrium quantity of bagels declined not because of the rise in price of flour but due to the rise in price of milk. Due to rise in price of milk, the cost of production of cream cheese has risen. The rise in cost of production will induce the producer to cut down the production of cream cheese. Therefore, there will be fall in supply as represented by the shift of S1 curve to S2 in panel (a). The fall in supply will lead to rise in price of cream cheese from P1 to P2. There will be a fall in demand for cheese due to price rise, as shown by the shift from Q1 to Q2. As demand for cream cheese declines, bagels demand will also fall from D1 to D2, as shown in panel (b). Fall in demand will lead to fall in equilibrium quantity of bagel, and quantity will from Q1 to Q2. Figure 1: Impact of price change on Complementary Goods Source: Created by Author When the government imposes price floor, it implies that price cannot be set below that level. If the price floor is imposed below the market clearing price, then through demand and supply mechanism price will reach at market clearing price. If the imposed flooring is set above the market clearing price, then market cannot attain equilibrium as price cannot fall below the level of price flooring. In such situation, demand for bagels will be less but there will be huge supply of it. Due to excess supply, the market will become inefficient. Due to high price of bagels, people will purchase less bagels so quantity demanded will decline. Therefore, there will a loss in the consumer surplus. On the other hand, as producer are getting high price, they will sell more and will earn high producer surplus by capturing a part of consumer surplus. However, some part of previous surplus of producers will be lost, because sellers have to forego some of its customers, who are not willing to buy bagels at high price. Social welfare is maximized when total surplus is maximised. However, due to price flooring, an amount of welfare is lost. This can be represented in the following diagram. Figure 2: Inefficiency of Price Flooring Source: Created by Author The triangle highlighted in red, is the portion that neither goes to consumers not to the producers. This is the deadweight loss to the society. Therefore, the total surplus is less in case of price flooring and it is inefficient outcome of the market. Boom- energy produces Horse-Energy Bars and Choco Bars. In order to understand, whether these products are complement of each other or substitutes, cross price elasticity of these goods has to be verified. Cross price elasticity implies how demand of one product changes due to change in price of another product. If the value of CPE is positive, then the products are substitute of each other. This implies that if price of Choco bar increases then demand for Horse-energy bar will increase. Moreover, if the magnitude is greater than one, then these products are close substitute of each other. If the value of CPE is negative, then the products are complements to each other. This implies that if the price of Choco bar increases, the demand for Horse-energy bar will decrease. If the magnitude is more than one, then these products are strongly complements to each other. If the CPE is zero, then it implies that there is no interdependence between these two products. In such case, there will be no change in the demand for Horse-energy bars due to change in price of Choco bars. References Rios, M.C, C.R. McConnell, and S.L. Brue, Economics: Principles, Problems, And Policies, 2013. Frank, R., Microeconomics And Behavior, 2014. Nicholson, W. and C. Snyder, Intermediate Microeconomics And Its Application, 2014.