Sample Political Science Paper on Effects Quotas on the Domestic (US) Price of Sugar As Compared To World Price Of Sugar

Effects Quotas on the Domestic (US) Price of Sugar As Compared To World Price Of Sugar

The US national government has restricted the amount of sugar being imported from outside countries. As a result, companies that produce sugar operate at a minimum price set by the government which has caused the prices for domestic sugar to rise compared with world prices resulting to local consumers paying more for the commodity compared to the international market. The minimum price set by the government is higher than the market price for sugar worldwide which has resulted to the sugar producing companies benefiting from charging high prices to consumers.

Reasons for Quotas Failure to save US Jobs

High sugar prices have resulted into a decrease in the number of jobs for people working in industries that use sugar as input, for instance confectionary shops. As a result of high input costs of sugar which takes a high percentage of ingredients, these industries fail to grow due to competitive prices from foreign confectioners who pay significantly low prices of sugar and import their products to US markets at a lower price, hence few jobs are created by local companies for US citizens. Additionally, confectionary industries opt to shift their operations to other foreign countries where sugar prices are low hence creating jobs outside the US economy.

Reason for Economists Support on Eliminating Protections

Protections limit the competition exposed to local industries.This results into minimal innovations since there is minimal competition in terms of quality and price. This compromises consumer’s tastes and preferences for the commodities. Competition results into increased supply of commodities in the market lowering prices following the demand and supply forces and causes production of improved quality goods and services as companies attempt to win a competitive advantage over their competitors.