Ventur and Competition Essay Example | Topics and Well Written Essays - 500 words

Ventur and Competition - Essay Example States is the Federal Sherman Act 1890, with each state having reciprocal antitrust provisions effectively mirroring the Sherman Act (Hovenkamp, 2005). The essence of the Sherman Act is the prohibition of agreements that unreasonably restrain trade, monopolies, attempted monopolies and conspiracies to monopolize (Sherman Act 1890, section 1). The relevant enforcement body is the Federal Trade Commission, the U.S. Department of Justice, state attorneys and general or private parties affected by any proposed anti-competitive measure (Posner, 2001). If a joint venture or partnership agreement is found to fall within any of the Sherman Act 1890 prohibitions, the penalties for violation include the following: The main reason that healthcare joint ventures can fall foul of the antitrust provisions under the Sherman Act is that often the partners will be competitors within the same market with the overriding purpose being to pool resources to maximise economic benefits (Elhauge & Geradin, 2007). However, if additional to this, the venture partners continue to compete outside of the joint venture agreement, the antitrust legislation imposes restrictions on conduct between the partners (Hovenkamp, 2005). Secondly, one of the partners in the venture may have market power or the result of the venture will be to increase market power, which can be anti-competitive if the partners to the venture are then enabled to set prices above a competitive level. Furthermore, in considering the proposed joint venture the company should consider the following four issues in particular: In considering compliance with Sherman Act provisions, it is vital for the company to consider the relevant market (Posner, 20010. The relevant market comprises the relevant service market and relevant geographic market (Elhauge & Geradin, 2007). The service market is where the market of services is â€Å"reasonably interchangeable† and the relevant geographic market is â€Å"the area of effective

Discuss local, state, federal taxation of a good Essay

Discuss local, state, federal taxation of a good - Essay Example This has produced a corresponding decline in the effectiveness of the tax as a revenue raiser, because the demand for goods has declined. Demand for services has risen, but services have been excluded from the base of taxable items, hence it does not contribute to state revenue. The shift in consumer demand from goods to services may be due to the taxation of goods as opposed to non taxation of services. But Tannenwald (2002) notes that cyclical influences can also shape demand, which may lead to an increase in State revenues. The explanation offered for this phenomenon is that tax consumption is more pro-cyclical than tax preferred consumption. When interest rates are low and the stock market is strong, consumers tend to spend freely on taxed items, which results in a boost to the economy and contributes a greater share of funds to State revenues. But as consumers continue to spend more on taxed goods, the level of savings also goes down because consumer debt keeps increasing. As consumer debt rises to a high level, there is a shift in consumer demand from taxed goods to untaxed services, which results in a contraction of the economy and a decline in the revenues earned by the State.(Tannenwald, 2002). With an increase in outsourcing and the production of goods at cheaper locations, consumers may still prefer to spend on taxed items because the goods overall have become cheaper, so that despite the tax the goods may still be priced at competitive rates (Tannenwald, 2002). Taxes play an important role in the final price of the product, since a higher tax on a particular good will make it less attractive for consumers to purchase, since the price of the good in the marketplace will be higher. In such a case, when the economy is strong, there may be adequate sales of taxed goods but when consumer debt rises and the tax remains high, the shift in consumer demand to services will result in a fall in