Business Ethic Essay Example | Topics and Well Written Essays - 750 words

Business Ethic - Essay Example It is clear that the government puts up a consolidated fight to come up with the required type of legislations but it is without consultation of the main players in the industry. It is true that the fact that the people have to pay dearly when the cost of the products produced is priced higher than usually is targeted by the manufacturer. Here, Bowie is looking at the negativity of having a company produce goods at the expense of having people in the environment around them face the impact of the environmental degradation. This is what is referred to as a negative externality. Externality of an economic transaction is an impact on a party that is not directly involved in the said transaction. This is where by the prices do not reflect the full costs or the benefits that are to be accrued from the production or consumption of the produce or service that is in question. This implies that the producers and consumers in the market may either not bear all the cost or obtain the benefits expected from the economic activity. A positive impact in the business is commonly referred to as an external benefit while the negative one is referred to as an external cost. This implies that from these two, one can either create an environment conducive for producing external benefits or minimize the costs of external costs. In this case of Bowie, there are more external costs than external benefits given the case of people having to be affected by the environmental effects caused by the creation of more vehicles that produce environmentally poisonous gases (436). It is cle ar that the people in the legislation field have to look at the effects of effecting these legislations and involve the key stakeholders to come up with the required regulations for the industry. In a very competitive market though, the existence of externalities will cause either too much or too little of the goods produced or consumed in terms of the overall costs and the benefits it is supposed