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International Price Escalation - Essay Example
Pages 4 (1004 words)
The world economy is changing at a faster pace these days. Due to the introduction of new technology, advanced production methods and expensive factors of production, the global economy is elevating at a higher level too…
The rise in the prices of all these commodities started in the year 2006, when the international markets faced a steep hike in the prices of all the eatables around the globe. This essay shall discuss the concept of price escalation along with its causes and the course to be taken to improve it. Price Escalation According to the definitions given by the economists, the concept of price escalation refers, more or less, to the concept of inflation in the economy. It is defined as the tendency and ability of prices to reach the supernormal heights when the products are being marketed. Taking this concept further, international price escalation occurs when the goods are particularly being marketed internationally. The companies, due to the affects of escalation, the companies normally engage their activities and resources in re positioning and establishing their brand overseas (ECLAC, 2006, Online). The major causes that contribute to such price hikes include import duties, trade barriers, added transport, warehousing and freight costs, insurance, international lawyer’ charges, and other necessary charges. Causes There are various causes for the price escalation of the commodities on international level. ...
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