EF! Fined $1million in Idaho

Steve Shook esw at u.washington.edu
Tue Nov 12 09:05:54 EST 1996


Bruce Scott TOK wrote:
> 
> But you have to recognise the unequal situation.  If the lumber company
> were fined 1 million, it could simply pass it on to their customers the
> way they do their advertising costs.  You and I cannot do things that
> way.

Bruce,
You're correct to some extent. IF the company is HUGE, then they can
likely pass the cost onto the consumer since the additional cost of
their product will be relatively small. If the company is a relatively
small lumber producer (a price-taker who has very little impact on the
price of lumber in the open market), then it would be virtually 
impossible to pass the cost onto customers without have a major, major
impact on the firms profitable (and viability) in the marketplace.
Coporate history is littered with evidence of the costs of punitive
damages to small firms - they tend to go out of business.

Regards,
Steve



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