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Key Issues Analysis When MRMC Ethical efficiencies in valuing and pricing
Pages 5 (1255 words)
The key issues in the article are inefficient use of scarce resources, incorrect pricing, and incorrect payments to the factors of productions. An example of inefficient use of scarce resources is the establishment of used-car lots in an Amish community. An example of incorrect pricing and incorrect payments to the factors of productions is the steel industry in the 1980s…
The opportunity costs are the goods and services that consumers want and value. Incorrect pricing has ethical implications. To charge too small a price for a product in relation to its production costs will affect revenue negatively, upset the delicate balances required for profit maximization, and lead to disastrous repercussions, perhaps even to the demise of the company. On the other hand, to charge too much for the product, more than people are willing to pay, will result in the same kinds of consequences. Incorrect payments to the factors of productions is unethical because it would also result in opportunity costs for the company. The opportunity costs include the foregone profits of producing goods and services that consumers want and also the opportunity costs arising from the greater community in which the firm exists - from the immediacy of geographical location to philosophical, religious, legal, sociological, and cultural implications of the greater world. Paid less than the value of his/her marginal product, the employee, a scarce human resource, would leave the company. Paid more, the company's opportunity costs would result in fewer resources from which to produce the goods and services the community wants.
One disposition is to put aside individual ethics and adopt only corporate ethics, that is, pr ...
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