edf40wrjww2CF_PaperMaster:Desc
Abstract: In the past U.S. tobacco companies have subsidized foreign farmers in order to raise profits in the short run as well as create competitive advantages in the long run. The short run profits are guaranteed to the farmers because they are signing on contract which enables profits for them, while the long term is solely on that of the foreign farmers and what they do after the contract has ended. These profits and subsidies will thus affect the equilibrium domestically and internationally due to new imports and exports. The countries will now be importing food instead of growing it themselves and exporting it, and likewise will be forced to export its tobacco crops it’s now selling. Changes in business practices happen on a regular basis and are done in order to help keep the businesses thrive and stay alive. This is one reason why Acme motors have now decided to move its production of engines to its Mexican plant, and keep the production of the rest of the car here in the United States. Acme has decided to make this move to increase profits for the entire company by lowering production costs of each vehicle being manufactured.
A subsidy is a form of financial assistance paid to a business or economic sector. A subsidy can be used to support businesses that might otherwise fail, or to encourage activities that would otherwise not take place. (Subsidy) U.S. tobacco companies are subsidizing foreign tobacco farmers to cut costs and make more profits for the United States and tobacco companies.
From subsidizing foreign tobacco farmers it has helped to increase the profits in the short run and possibly long run because of the chea ...