Lumber Liquidators

Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • #7494
    duxrule
    Participant

    Well…There’s your “free market” at work.

    Lumber Liquidators stock sinks 20% on CBS report

    Shares of Lumber Liquidators fell sharply Monday after a “60 Minutes” report alleged the U.S. retailer of hardwood flooring has installed Chinese-made laminate flooring in many American homes that contain far higher-than-accepted levels of formaldehyde, a chemical known to cause cancer.

    http://www.msn.com/en-us/money/companies/lumber-liquidators-trading-halted-after-cbs-report/ar-BBi8UHf?ocid=ansmarketwatch11

    Perhaps our resident laissez-faire economist can shed some light on these business practices.

    #7500
    jerry1949
    Spectator

    It doesn’t go against free market principles to impose laws that protect citizens agains the external costs of doing business. Trucking companies must be forced by law to cover their loads or stones will break windshields and wreck cars, and likewise imports that are not up to standard or are dangerous should be controlled.

    Free marketers don’t want lawlessness. The free market won’t work unless within a framework of good laws that are enforced.

    #7502
    Amus
    Participant

    The way the free market works in instances like this is that after several hundred people die from cancer, people will stop buying flooring products from Lumber Liquidators and they’ll go out of business.

    It’s only a few hundred deaths, but lives well spent for maintaining a Free Market Economy.

    #7503
    Amus
    Participant

    BTW;

    Lumber Liquidators.

    Wouldn’t that literally be “pulp”?

    #7505
    jerry1949
    Spectator

    The way the free market works in instances like this is that after several hundred people die from cancer

    But that’s not going to happen because of the news story. The media and watchdog groups are also part of a free market system.

    #7506
    edselehr
    Participant

    The Traits of Perfect Competition:

    http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=perfect+competition,+characteristics

    The four key characteristics of perfect competition are: (1) a large number of small firms,
    (2) identical products sold by all firms,
    (3) perfect resource mobility or the freedom of entry into and exit out of the industry, and
    (4) perfect knowledge of prices and technology.

    This utopia can’t exist in the real world, so well-regulated markets must exist. And “well” means properly, not thoroughly. The only question left is: what is the right type and degree of regulation?

Viewing 6 posts - 1 through 6 (of 6 total)
  • You must be logged in to reply to this topic.