Subject category:
Ethics and Social Responsibility
Published by:
Harvard Kennedy School
Length: 3 pages
Share a link:
https://casecent.re/p/7269
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Abstract
Much of Indonesia''s clove crop is used to flavor Krepek cigarettes, which are extremely popular in the country. Clove farmers are poor, however, and a group of Indonesian businessmen proposed that the government require that Krepek cigarettes manufacturers buy all their cloves from a marketing company that the businessmen would form. As the exclusive supplier of cloves to the Krepek cigarettes manufacturers, the marketing company could charge a higher price for the cloves and pay a higher price to clove farmers. This case can be used to discuss supply and demand curves, the problems of keeping markets from equilibrium, and the incidence of a price increase.
About
Abstract
Much of Indonesia''s clove crop is used to flavor Krepek cigarettes, which are extremely popular in the country. Clove farmers are poor, however, and a group of Indonesian businessmen proposed that the government require that Krepek cigarettes manufacturers buy all their cloves from a marketing company that the businessmen would form. As the exclusive supplier of cloves to the Krepek cigarettes manufacturers, the marketing company could charge a higher price for the cloves and pay a higher price to clove farmers. This case can be used to discuss supply and demand curves, the problems of keeping markets from equilibrium, and the incidence of a price increase.