New Imperialism and Politics 1850 and 1914

Introduction Imperialism refers to the process whereby a country expands its economic, political, and social power through military conquest.Advertising We will write a custom essay sample on New Imperialism and Politics 1850 and 1914 specifically for you for only $16.05 $11/page Learn More Others perceive imperialism as the exploitation of the indigenous communities whereby a foreign power takes advantage of its advancements in technology and civilization to impose policies and rules to the locals whose forms of life are simple. Such communities exist in simplistic forms whereby there modes of production are traditional. Britain is one of the countries that took advantage of its level of economic and technological developments to invade other states and impose its policies on them. Imperialism first took place when British colonialists invaded the American continent and forced the locals to support their administrations. However, the American Revolution ended the British dominance in the region, forcing the British to look for other alternatives owing to the growing population and the development of industries (Eldridge 36). The American Revolution opened the eyes of British colonialists who noted that mercantilism was an ineffective economic policy since it could easily be affected by political currents. In 1846, the Corn Law repealed all barriers of trade, which opened up the parts of the United Kingdom. United Kingdom was capable of distributing artificial products to most parts of the continent such as Germany and France. Since its dominance was wading, the British government suggested that the state had to reignite its glory by invading other parts of the world, particularly the Asian region and Africa. Between 1950 and 1914, Britain dominated the world because it had a strong source of labor and a stable market. It is noted that new imperialism was characterized by some features, which will be discussed in this article.Adver tising Looking for essay on history? Let's see if we can help you! Get your first paper with 15% OFF Learn More Features of New Imperialism In 1842, the British invaded China and imposed its policies, including forcing the locals to consume foreign goods. In 1858, new imperialism was felt by even the powerful states such as Japan, which led to the readjustment of regimes. In Japan, the Meiji Period was reinvented whereby the British had full control of production and consumption of goods. All major industries and organizations were controlled by the British during the Meiji Period in Japan. It is therefore noted that the British economic might declined due to the emergence of others, which forced it to engage in imperialism. One of the characteristics of the new imperialism was that Britain was no longer a major economic and political power in the world politics due to the emergence of other powers such as the United States and Germany. The power of Britain to manufact ure finished goods went down after the emergence of Germany and the United States. These new powers gave British firms tough competition (MacKenzie 21). In Europe, Germany posed serious threats while the US dominated the American market. From 1880 to 1913, the economic capability of Britain was in a decline, with a reported GDP decline of a quarter each year. In the food market, British manufacturers could do nothing because of the textile and metal industries established in Germany. Another characteristic of the new imperialism is the long depression, which affected the British to an extent of looking for alternative strategies of economic development. The long depression of 1873 to 1896 is considered one of the greatest in human history. In fact, it is considered the immediate cause of formal colonialism because the British government could not sustain its economy without involving invading other countries. During the depression, firms employed strategies such as forming partnersh ips and amalgamations, which brought about inefficiencies and destabilization of the economy.Advertising We will write a custom essay sample on New Imperialism and Politics 1850 and 1914 specifically for you for only $16.05 $11/page Learn More The development of new technologies helped in the manufacture of goods and services. Britain was a monopoly in major sectors of the world economy hence the new technology helped it in lowering the costs of production. Unfortunately, there were no sufficient markets to absorb all the manufactured goods. In the domestic market, the country manufactured more than it could be consumed. In the agricultural sector, the United States exported cheap grains, which strained the British farmers since the costs of production were very high in the country. This meant that American goods were favored since they were cheap. A considerable percentage of the European population was predominantly rural meaning that it did not have the purchasing power. Goods produced lacked markets. After 1873, it is established that the long depression affected each state in Europe, forcing the world superpowers such as Britain to think about imperialism. There were many new things in the new imperialism because Britain embarked on banking and shipping as its major source of capital. During the time, there was advent of new trade referred to as the slave trade whereby slaves were shipped from Africa to work in European industries while finished products were transported from where they were less needed to where there was high demand. For instance, cheap finished goods were transported from Europe to Africa while slaves were ferried to the United States. The new trade boosted the economy of the country to an extent that it was able to emerge from the long depression stronger. The long depression affected the economies of a number of states in Europe to an extent of forcing others to close their major industries, which were th e major sources of income. New imperialism era was characterized by cutthroat competition. Britain developed some of the strategies that helped it to outdo others in the market. One of the strategies was capitalizing on the economies of scale whereby firms and industries were encouraged to produce in mass. In this regard, formation of alliances was highly encouraged because it could help in producing in mass.Advertising Looking for essay on history? Let's see if we can help you! Get your first paper with 15% OFF Learn More Moreover, formation of partnerships among traders gave them a lobbying power since they would have a higher bargaining power. Since the market was flooded with foreign goods and services, British investors would easily outdo them through joining hands. In 1870, financial houses in London achieved their objectives because they were able to control the industry by successfully boxing out competitors. The investors formed a strong union that helped them a lot in the banking sector. Investors were in control of the economy meaning that the government could never make policies without consulting them. They became an important partner in government since the state acquired loans from them. Business persons were able to break the aristocracy since they controlled the money market while the ruling class simply controlled land. It is reported that the business community was able to control politics in the country through funding of political parties and sponsoring bills in parliament. In oth er words, they were able to achieve whatever they wanted from government. There was a new trend in 1970s because financial holders were able to control the affairs of the state, unlike the industrialists in 1950s, who simply depended on the government for direction. Financial investors were able to influence the formulation of domestic and foreign policy because they pressurized the government to amend policies that took care of their foreign investments. In many parts of Africa, the investors entered into partnerships with African governments, especially in the construction of infrastructure such as railway (Blanken 58). The British government was committed to supporting investment in foreign countries, but the new trends could not allow the government to declare support for its investors. The foreign environment became so hostile to British investors. Egypt is always cited as an example of the places that became so hostile to British. Investors could not continue committing their funds in such places hence they needed government assurances. They forced the government to come up with strict laws that would protect their interests. In fact, the government became so hostile in places they had control. Some scholars of imperialism such as Hobson noted that finance was actually controlling everything in the international system. The historian noted that foreign markets offered high returns because they had large populations as compared to the local markets. The British government was forced to negotiate with foreign independent states because they had cheap labor, adequate markets, and plentiful raw materials. It is concluded in this section that financial interests were the driving force behind new imperialism. The imperialists were able to acquire new markets in Africa, Asia, and the Caribbean. Colonial expansion increased competition among states in Europe because each state wanted to capture its share of the market. It should be understood that Britain viewed African and Asian states in terms markets and sources of labor. The new regions were very fertile and rich of resources. The British scrambled for space in these new regions in order to increase their investments. The new industrial powers such as France and Germany were now in direct competition with Britain in terms of political influence and economic capability. The only solution to the new problem was expanding the territories, which would be achieved through colonialism (Malcolm and Stewart 88). Since the Europe market was flooded with goods from the United States and Europe, acquisition of new territories was the only way out. The economic and political power of Britain was no more. The state had to strategize on how to acquire its lost glory. Some analysts noted at the time that Britain had to acquire secure territories if it were to continue dominating the world. It was perceived that other states could still acquire new territories hence it was critical for Britain to do i t first. If other states acquired new territories before Britain, the power of Britain could be reduced further. British imperialists observed that formal colonialism was the only way because the state was losing economically and politically to other states such as Germany, the United States, and France. In France and Germany, there were protectionist policies whereby companies were given economic protection to enable them to grow. It was very difficult for British investors to penetrate. Some scholars note that Britain moved to secure new territories in Africa and Asian mainly because of its weakened political and economic power. Such scholars refute claims that Britain acquired new territories to strengthen its power in the world (Darwin 69). Others countries in the world, such as Germany and the United States, adopted protectionist policies while Britain embraced a free market economy. This was extremely dangerous because it could not resort to protectionist policies given the fa ct that it had a number of investments in other countries. Britain could not develop further because of the trade policies that gave undue advantage to other states. In early 1900s, Chamberlain tried to come up with some economic policies, which included Tariff Reform, failed because the state embraced free market economy. The prime minister tried to impose new taxes on imported goods, but the policy could not be adopted since the country was already in agreement with other states. Therefore, the only way to protect trade links and the country’s economy was through the adoption of new imperialist ideas. Conclusion Imperialism entails invading another society and imposing policies that are inconsistent with the local culture. It can be concluded that Britain made a decision to adopt new imperialism mainly because of its declining political and economic power. A country is unable to influence the decisions at the global level if its economic and political power is below par. Th e emergence of other states such as the United States, France, and Germany threatened the economic power of Britain. Britain had to come with a strategy that would help it regain its lost glory. This would not be achieved through expanding markets in the European region since the market was already flooded. Therefore, the only way to invade other societies in order to acquire raw materials, access markets, and acquire cheap labor. Works Cited Blanken, Leo. Rational Empires: Institutional Incentives and Imperial Expansion. Chicago: University Of Chicago Press, 2012. Print. Darwin, John. After Tamerlane: The Rise and Fall of Global Empires, 1400–200. New York: Penguin Books, 2008. Print. Eldridge, Can. British Imperialism in the Nineteenth Century. London: Macmillan, 1984. Print. MacKenzie, John M. Imperialism and Popular Culture. Manchester: Manchester University Press, 1986. Print. Malcolm, Pearce, and Stewart, Geoffrey. British Political History 1867-1990. New York: Routledg e, 2002. Print. This essay on New Imperialism and Politics 1850 and 1914 was written and submitted by user Teagan E. to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

Free Essays on China as Most Favored Nation

China as Most Favored Nation Essay written by: TapOut136 What is the debate on weather or not China should retain favored-nation trading status all about? Is it really a decision on what is best economically for the United States, and China. Or is it: the issue of Chinese human rights violations and the fact that if the United States where to revoke the favored nation status of China it would have a profound negative impact on the U.S. economy alone. (+)Most-favored-nation trade status started in the United States as a version of the European preferential trade system. The Carter Administration first granted most-favored-nation trading status to China in 1980, following the historic efforts of President Nixon during the 1970’s to restore diplomatic ties. Historically, a significant difference existed between the unconditional most-favored-nation clause in European trade law and the American version of conditional most-favored-nation. Under unconditional most-favored-nation status, one country's extension of tariff concessions guarantees the same concessions to all nations associated with it through commercial treaties. American conditional most-favored-nation status provided treaty signatories only the opportunity to negotiate most-favored-nation status when most-favored-nation status was extended to another trading partner. Thus meaning that the United States gives significant economic advantages to one nation in the form of most-favored-nation trading status. Under the Trade Act of 1974, most-favored-nation status could only be granted to China through a Sino-American bilateral commercial agreement and satisfaction of the Jackson-Vanik Amendment requirements. The Jackson-Vanik amendment states that the President of the United States may grant a communist country such as China most-favored-nation trade status if it was in conjunction with a trade agreement and upon proper improvement that China would permit emigrati... Free Essays on China as Most Favored Nation Free Essays on China as Most Favored Nation China as Most Favored Nation Essay written by: TapOut136 What is the debate on weather or not China should retain favored-nation trading status all about? Is it really a decision on what is best economically for the United States, and China. Or is it: the issue of Chinese human rights violations and the fact that if the United States where to revoke the favored nation status of China it would have a profound negative impact on the U.S. economy alone. (+)Most-favored-nation trade status started in the United States as a version of the European preferential trade system. The Carter Administration first granted most-favored-nation trading status to China in 1980, following the historic efforts of President Nixon during the 1970’s to restore diplomatic ties. Historically, a significant difference existed between the unconditional most-favored-nation clause in European trade law and the American version of conditional most-favored-nation. Under unconditional most-favored-nation status, one country's extension of tariff concessions guarantees the same concessions to all nations associated with it through commercial treaties. American conditional most-favored-nation status provided treaty signatories only the opportunity to negotiate most-favored-nation status when most-favored-nation status was extended to another trading partner. Thus meaning that the United States gives significant economic advantages to one nation in the form of most-favored-nation trading status. Under the Trade Act of 1974, most-favored-nation status could only be granted to China through a Sino-American bilateral commercial agreement and satisfaction of the Jackson-Vanik Amendment requirements. The Jackson-Vanik amendment states that the President of the United States may grant a communist country such as China most-favored-nation trade status if it was in conjunction with a trade agreement and upon proper improvement that China would permit emigrati...

DDT Article Example | Topics and Well Written Essays - 1000 words - 1

DDT - Article Example However, due to high prevalence and mortality rate associated with malaria, I suggest review of the policy governing the use of DDT and the insecticide be reintroduced to prevent high malaria outbreak in African continent. To make this decision, it is important to have toxicological data on the effects of the insecticide on human health and the environment. Concerns about toxicity of DDT on human health are based on the storage of the compound and its metabolites in the human body fat, the occurrence of DDT residues and its radicals in human milk, the potential of causing cancer in addition to fears of interfering with hormones in the body (WHO, 2007). From these concerns, it is important to have toxicological data regarding its effects on various physiological processes in the body. These include effects on respiratory, reproductive and circulatory systems among others. Currently, toxicological data on DDT indicates that exposure to high concentration of the insecticide within half an hour does not cause permanent health effects (CDC, 2010). In addition, the insecticide has low order of severe toxicity when inhaled (CDC, 2010). ATSDR (2002) lists the four phases of disposition of toxic compound in assessment of its toxicity. Absorption of a compound into the body is the first phase, followed by its distribution in the body in the second stage. The third phase entails metabolism or the breakdown of the compound in the body and finally secretion of the chemicals from the body is the fourth and final phase (ATSDR, 2002). DDT enters the body through contact of the chemical with skin and the mouth when swallowed. WHO (2007) notes that the insecticide has marginal severe toxicity on dermal contact but is extremely poisonous when taken orally. The first phase of absorption involves the movement of molecules across membranes.

Extra Credit ANTH Essay Example | Topics and Well Written Essays - 750 words

Extra Credit ANTH - Essay Example The scientists simply study humanity; they tend to figure around how the human race has changed to the current state it is today. Cultural Anthropology is a branch that is concerned with the behavior patterns of the human race. This entails acts of man of clothing, religious activities, and land activities. The cultural branch of anthropology is divided into two, on is ethno linguists, which deals with the study of culture language and ethnomusicologists which is the study of music traditions. Archeology is also another branch of anthropology that deals with the study of society culture. This involves the study of artefacts which reflect the early mans culture and their daily life.Lingustic deals with the study of language. This branch tends to explain how man communicated both verbally or in written form. Physical Anthropology is a branch of anthropology that is concerned with the study of human evolution and the genetics of human race. Anthropologists study everywhere humans and th eir ancestors lived. The scientist through their investigations tend to answer the question ‘why are we what we are’ as biological organisims.The biological changes responsible for bringing humanity to its present state. The ancestral remains in bone form of the human race are called hominids. Anthropologists study the hominids on their physical appearance, intelligence change that makes man distinct from other creatures. The study of the genes in man and how they influenced by the environment. Environmental factors and the effect it has to man, this include climate. The scientists investigate on the reaction of man in relation to the climatic changes. The advantages and the disadvantages of climate on the social and cultural well being of man. The scientist study the human population in relation to climate. The difference of human beings to other creatures in relation to physical anthropology research have been identified. Man is a bipedal creature, he walks on two fee t. The human race has a unique dental structure different from other creaturers.Human beings have a material culture, of which they use objects to manipulate a given environment. According to Anthropologists man has a developed thinking capacity compared to other creatures. Scientists have built a system of ideas to link thoughts explaining the result of an experiment. A fundamental theory on the origin of man was constructed by Charles Darwin. He was given the responsibility of collection, documentation and study of the natural world. Darwin succeeded in coming up with the variations of physical characteristics and their adaptations. He termed adaptation as Natural Selection; this is where the biological characteristics of species boost their survival. In his research he acquired information from scientific subjects which are taxonomy, geology, paleontology, demography and systematics. There were various contributions of scientists in coming up with a theory on evolution.Scientst R obert Hooke was the first in the discovery of cells using a simple microscope. Georges Cuvier discovered the concept of extinction by studying a fish fossil. James Hutton provided evidence is the construction of evolution life span. John Ray discovered the first scientific classification of plants and animals. Thomas Malthus came up with the survival characteristic concept. Carolus Linnaeus came up with a classification system by giving organisms unique names for easy classification. He came up with the taxonomic classification o

How to Care for a Dog Essay Example for Free

How to Care for a Dog Essay †¢Dog-Naming Tips Naming your pooch is a joyful task, but one youll want to put some thought into ahead of time. Both you and your dog will have to live with the name you choose for your entire time together. There are many ways to come up with appropriate dog names, including appearance, heritage, special characteristics, and behavior. We cover them all in this section. We will also tell you about some dog names and dog-naming mistakes you will definitely want to avoid. †¢Dog Supplies Think of how many personal items you have, and how many of them are indispensable to your health and happiness. Dogs require fewer accessories than us humans, but theirs are no less vital, and by selecting the proper items, you can improve your poochs health in ever regard. If youve ever ventured inside a pet store, you know how confusing it can be just picking out a collar or leash. We will cover all the basics like food and grooming accessories, as well as specialty items like a carrier. †¢Dog Feeding Nothing is more vital to the health of your dog than proper feeding. Dogs are eager eaters, and this is part of their charm. But it also means that you need to be well informed about what is will give a dog good health and energy and what could be bad for her, despite her willingness to try it out. Here are all the details, including several make-it-at-home recipes for delicious, nutritious and economical dog food. (We also answer the eternal question, Why do dogs eat plants?) †¢Puppy-Training Tips A new puppy can really melt your heart, but they can also be a handful. The sooner your pooch is accustomed to doing his business outdoors and on schedule, the better for all of you. Interestingly, this is made easier when correlated to the feeding schedule. There is more to training your puppy than housebreaking, however. You must also know the correct way to humanely discipline your new dog when he misbehaves. All the details of this crucial stage in your dogs lif e are in this section. †¢Dog-Grooming and Bathing Tips Dogs can get messy, and they dont naturally keep themselves quite as clean as wed like them to be as co-habitants in our homes. As the owner, proper grooming on bathing is your responsibility. But there is more to caring for your dog than simple bathing. You must also care for your dogs nails, teeth, eyes and ears. So in this section we cover key strategies for keeping your pooch clean and everyone happy. Well even tell you when its time to throw in the towel and seek the aid of a professional groomer. †¢Dog-Proofing Your Home Dog-proofing your home can be just as challenging as proofing your home for a child or for allergies. For instance, do you know which types of houseplants can be poisonous for dogs? You might also be surprised to learn that some of your favorite treats can really upset your dogs stomach. For everyones health and happiness, its vital to make your house safe for your dog and to train the pooch to respect the home, as well. In this section, we give indispensable advice for forging a good relationship between your pet and your residence. †¢Dog-Proofing Your Yard Most dogs spend at least a little time in the yard, but this congenial place poses its own challenges and dangers. First, you will need the right type of fence to keep your dog from roaming the neighborhood where he could possibly get injured or hurt others. We will examine the option of invisible fences and the so-called shock collars. Also, everyone needs a place to call home, and that includes your dog. Well tell you how to design and build the perfect doghouse. Learn how to keep both your dog and your yard safe and happy. †¢Dog-Identification Tips Nothing else matters when your dog is lost. Taking a few simple steps when she first comes home can save everyone heartache later. The right tag can get your dog back home where he belongs in a matter of hours. Here we discuss the best methods of providing identification for your dog. We will also discuss some identification options that you may not have heard of. Did you know that some pet owners tattoo their dogs with vital identification information? How about microchip implants? Regardless of the method you choose, we will also tell you how to register your dogs identification. Before you can really get to know yourdog, you have to give him or her a name. Move on to the first section for some tips on christening your new friend.

The Trials of Odysseus of Homers Odyssey Essays -- Odyssey essays

The Trials of Odysseus   Homer's epic poem The Odyssey was written after his Iliad which told the tales of the Trojan War. This Odyssey told of the wanderings of a prominent warrior and ruler, Odysseus. Odysseus fought in the Trojan War and, after the Greeks claimed their victory at Troy, began his prolonged journey home. During his travels Odysseus faced many obstacles which he had to overcome. Through his wanderings, Odysseus had to prove his valor, intellect, and determination. Incorporated into The Odyssey are many current-day characteristics of man including a constant dependence on others, the presence of a greater vision, or lack there of, and the essence of a sensitive side behind courage and pride. At times throughout The Odyssey Odysseus didn't think about the consequences of his actions and depended on guidance from the gods to help lead him in the right direction. Odysseus was quick to take action and occasionally made poor decisions that were bound to harm him. Odysseus was eager to fight, even if he had little chance of survival. His impulsiveness resulted in Athena coming down from Mount Olympus to warn him saying "Foolhardy man! Still bent on war and struggle! Will you not even yield to immortal gods? This is no mortal being, but an immortal woe, -dire, hard, and fierce, and not to be fought down. Courage is nothing; flight is best" (116). Odysseus didn't know when to run and leave a situation and when to face and fight. He believed that his courage would pull him through to victory, even against a goddess. Without Athena's wisdom, Odysseus was sure to meet his doom because there was no way that he could defeat the goddess Charybdis. Odysseus not only depended on immortals to get him out of a mess, b... .... He felt comfortable showing this side because he knew that she wouldn't laugh at him, but would be understanding because she felt the same as he did; they both longed for each other. The Odyssey involved many current-day characteristics of man including a dependence on others, the existence of a greater vision, or lack of it, and asensitive side found behind courage and pride. Today people still face these problems and must work to overcome them. Man must learn to survive on his own determination and strengths instead of others. Man must also learn to see a greater vision and look at the big picture rather than the moment. Lastly, man must decide with whom he wants to share his feelings of fear, love, and despair so he can experience a greater fulfillment in life. Works Cited: Homer. The Odyssey. Trans. Robert Fitzgerald. New York: Vintage Books, 1962.

Critically Evaluate the Management Model of Baumol

Under the traditional economic understanding, it is always assumed that profit maximization is treated as the main goal or objective for businesses, subject to perfect knowledge, single entity and rational logic. However, as illustrated by the principal-agency problem, managers do not usually make rational decision entirely like owners who take company interest as their sole basis for their decisions. Past examples have shown that managers do take their own personal goals and satisfactions as consideration in their decision-making. In addition, information gathering is not always perfect as managers do make decision by relying solely on the implicit knowledge gained from past experiences, without referencing to the macro-economic environment and the current market changes. Combining all these factors, it is therefore understandable that businesses do not always work toward profit maximization, at least in the short term, and other objectives like financial objective, market share, executive power, etc. do involve in business decision making. However, as pointed out by various academics (Baumol, 1962; Marris, 1964; Williamson, 1963), profit maximization does not always serve as the only correct objective for a firm, especially at various phrases of the business on a timeline scale. A point-in-hand is Baumol model. As an alternative to profit maximization model, Baumol model works on the correlation between price and output decision with the objective of maximizing sales revenue, subjected to minimum profit constraint by shareholders. In profit maximization model, profit is maximized at the output where Marginal Revenue (MR) is equaled to Marginal Cost (MC) whereas Baumol Model emphasizes on maximizing sales revenue (TR) and may miss the MC = MR point to achieve its goal. This model argues that businesses try to maximize sales revenues rather than profits with the possible motives such as growing or sustaining market share, to fill up spare capacity, discourage new entrants, management performance and etc. In addition, Baumol model provides a platform to understand some of the pricing strategies adopted by certain industries, which usually share common characteristics of having huge sunk cost and low variable cost. In such industries where fixed cost or sunk cost takes up a huge part of the total cost, producing a single unit and its maximum allowable output (without expanding its capacity in the short term) does not have any significant impact to the total cost. In such instances, profit maximization model is neither practical nor feasible as a focus of the model relies on seeking the output point where MC=MR. In the case of Walt Disney, the operational cost does not differ much whether there is one patronage or maximum allowable patronages as a theme park has to be fully functional during its operation hours, which render the MC at zero or near zero level. The objective of the company to seek sales revenue maximization for the day rather than focusing its effort to achieve the output point where MC=MR to maximize its profit does make sense. This explains the two-part pricing strategy adopted by Walt Disney where a fix initialization fee per entry is charged and allows the patronage to have as many free rides as they wish. Another example is the telecommunication industry, where the initial investment/fixed cost (for example launching the satellite and setting up the infrastructure) is huge, and the variable cost per call is insignificant to the total cost. In such industry, firms will focus on maximizing sales revenue (with constraints to maximum capacity/output) by using strategies like price discrimination strategy. In this strategy, the firms charge a different unit price to peak and off-peak hours, as there is plenty of spare capacity at off-peak hours. Since MC of output is low, any additional revenue that can be generated from this surplus capacity will be profit to the firms. As such instance, it is rational for telecommunication industrial to adopt sales maximization model like Baumol. In addition, as short term capacity is always constraint and limited, telecommunication industries would not want to experience loss sales due to their inability to meet customer demand, especially during peak hour usage. As service providers, consistent and frequent service failure could prove to be fatal in term of their survival and their long-term brand reputation. Therefore it would make sense for telecommunication firms to divert the peak-hours traffic into non-peak hours by using a price discrimination strategy which segments the users based upon their willingness and abilities to pay. For instance, business-users are willing to pay higher price for peak-hours usage due to their inelastic demand whereas in contrast, leisure-users’ demand is elastic and are willing to make call during off-peak hours in return for lower price. By adopting the price discrimination strategy, telecommunication firms are able to maximize sales revenue during peak and off-peak hours by balancing the air-time traffic based upon different market segment of users. At this point, it is also noticeable that one of the characteristics of Baumol firms lies in the perishable products/services offered which cannot be inventoried. The loss sale of the day on the unutilized capacity/outputs is an opportunity cost to the firms. Baumol model is not only applicable to huge/large corporations, but also to small retailers like bakery shop or wet market, which explains the reason why some bakery shops offer a special discount one hour before the shop closed to maximize the revenue. The rationales applied similarly to the low cost carriers (LCC) where price discrimination is used as a strategy to maximize revenue. LCCs sell a cheaper price to early booking passengers and a higher price for last minute passengers to increase the revenue. LCCs used the existence of multiple segments to serve and the opportunity to utilize surplus capacities to generate additional revenue. The adoption of sales revenue maximization model is also used as an effective way of securing additional market share within a regulated market with limited players where market dominance is vital. In related to pricing, add-on product/services like travel insurance, priority boarding and choosing-a-seat are used as bundled offering to the customer to gain extra profit. Firms are willing to earn a smaller profit if it means that they are able to gain a competitive advantage from their rival firms. As an illustration, Fitness club is a good example to elaborate how Baumol model is applied through adopting different pricing strategies. The reasons behind Fitness Club in adopting Baumol model include penetration to new market segments, retaining existing customer and to fill up spare capacity. True Fitness, which is a chained fitness centre, is effectively using Baumol model by offering different pricing strategies to capture different market egments, for instance, offering monthly fees to uncertain-customer and yearly/lifetime membership to certain-customer. Two types of pricing strategies are used by True Fitness to maximum its sales revenue, which are:- i)Two part pricing ( lifetime membership) The company offers a lifetime membership at ? 1. 5K as one-off payment and charges a minimal price of ? 20 yearly as administration/subscription fee. By payi ng a lifetime membership fees as fixed price, the customers are able to enjoy the facilities for life for as low as ? . 67 per month, which no other rivals is able to compete with this low price. As per other industries discussed above, fitness clubs have the similar characteristic like high initial set up cost and low marginal cost to adopt the Baumol model. The company charges an upfront fee to gain maximum consumer surplus and utilizes the yearly subscription fees, which is equaled to the marginal cost/average variable cost, to cover its yearly running costs. In addition, in order to adopt the two-part pricing strategy to maximize sales revenue, the company needs to have a minimum output (also known as critical mass), so that the full consumer surplus can be derived from the fixed fees. For example, if the yearly running cost (without considering the depreciation cost of the initial set up) is ? 200,000, in order to offer a yearly subscription fee of ? 20, the company needs to have a minimum membership of 10,000 in order to reduce the average variable cost/marginal cost to this level. By adopting Baumol model, which gives a higher output with lower price, this is achievable. This pricing strategy is also applicable to other chained-companies where the firms can derive the maximum profit from the fixed fee and use it as capital/investment to set up a new chain store. At the same time, individual chain store is able to run by itself from the revenue derived from the minimal pricing. ii)Price discrimination ( monthly membership vs. lifetime membership) True Fitness segments their customers into certain and uncertain customer by ffering different pricing to monthly and lifetime membership. The club is willing to offer a lower price to customers who are willing to commit, in comparison to uncertain customers. As illustrated in earlier examples, fitness clubs need to fill up spare capacities as any unutilized capacity carried an opportunity cost. With customers’ commitment, they are able to secure their stability in term of both volume and sales revenue. For thos e uncertain customers, the company charges a higher price, which customer willing to pay due to the flexibility and short-term commitment. From the above illustrations, it is apparent that a key characteristic of the Baumol model hinges on the elasticity of demand. As shown, Baumol model uses pricing strategies as a mean to achieve revenue maximization, and is therefore heavily dependent on the price elasticity to achieve the objective of the model If the demand is inelastic, Baumol model will not work as the demand of the product/services will not increase proportionately and therefore the sales revenue will not maximize from the reduction in price. In addition, advertising effect has not been considered in the above examples, which is a common tactic used to increase the inelasticity of demand. The psychological effect of advertising has been proven effective in occupying the mindset of consumers through brand image building, which increase the affiliation of the consumers to certain products/services, thus the inelasticity of the demand. The pointers from the last paragraph are well-illustrated by the Memo 1 example in Baye text book. In this example, it is shown that the price change does not correlate with the demand. By reducing the price from the current, $10. 50 to $10, the subscribers drops from 881 subscribers to 842, causing the revenue to drop from $9251 to $8240 and therefore a profit drop of $614. 5. (Appendix 1). In reverse, the firm should increase the price to $11. 5 to maximize the revenue at $11282 and a price of $12. 5 to maximize the profit at $4734. One of the reasons is due to the advertising and promotional effort from the company which increases the inelasticity of the demand. Secondly, since a loyal group of subscribers has already been amassed, STARZ network functions more as an add-on product to the existing subscribers. The combination of these two factors explained the reason why sales revenues and profit actually increases with price increases. In addition, from the data on STARZ network (Appendix 1), it is apparent that STARZ network does not share the same characteristics of high fixed cost or excess capacity to apply Baumol model. Instead, it seems like advertising or bundled pricing works better for STARZ network rather then price reduction. Further to the points above, Baumol model players are highly susceptible to the price reaction from their rivals, which could easily result in a price-war especially in an oligopolistic market. The existence of a floor triggering price in Baumol model constrained the players from lowering the price too much which will defeat the purpose of revenue maximization. Thus, it is highly unfavorable for Baumol model players to induce a price-cutting reaction from their rivals when they attempt to lower the price. This explained why certain Baumol model players used â€Å"noise† as disguise to their rivals when lowering the price to achieve revenue maximization. To summarize, long-term profit pursuance remains as the ultimate objective for any business. However, due to dissimilar characteristics of different industries, there are various models that can be used to achieve this long-term objective, which explains why certain firms are willing to sacrifice profit today in exchange for profit tomorrow. As illustrated through various examples in this assignment, the application of the correct model for the right industries and at the correct phrase of the company life-cycle becomes an even more important decision for managers to make. With the understanding and knowledge gained through the detailed analysis and critique of Baumol model, an useful insight to the economic rationale adopted by various industries, like Walt Disney, LCC and telecommunication firms is achieved. Bibliography Mercuro, N. , Haralambos, S. Gerald, W. , 1992. Ownership Structure, Value of the Firm and the Bargaining Power of the Manager. Southern Economic Journal, 59(2), pp. 273-83. Baumol, W. J. , 1996. Prediction and the logic of the Averages Variable Cost Test. Journal of Law and Economics, 39(1), pp. 49 – 72. McNutt, P. A. , 2008, â€Å"Signalling, Strategy & Management Type†, Available at: http://www. patrickmcnutt. com/docs/PatrickMcNutt. com_ebook [Accesses 20 Jan 2009]. Baye, M. R. , 2009 . Managerial Economics and Business Strategy. International ed. New York: McGraw-Hill. Conway, L. L. & Craycraft, J. L. , 1974. Sales Maximisation and Oligopoly: A Case Study. Journal of Industrial Economics, 23(2), pp. 81-95. 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