LS 312 Discussion
Institutional Affiliation
Name
Consumer product safety has shifted from the concept of “caveat emptor” to government agencies’ creation to protect consumers. “caveat emptor” the buyer is responsible for checking the quality of the goods he or she wants to purchase. Consumer product safety has introduced government agencies that counter checks the products to ensure they are safe to be used. A recall is issued when the manufacturers determine that a vehicle has some safety risks to the person using it. Manufacturers must fix the problem, replace the vehicle, or refund the money to the buyer (Crafton, Hoffer, & Reilly,1981). Manufacturers are required by the law to make products that are safe to use. Reputation for quality, injury, or death shows how much a brand suffers from a recall.
National Highway Traffic Safety Administration (NHTSA) ensures that all cars purchased are in good condition to be used. When consumers file many complaints concerning safety issues, NHTSA investigates the steps that lead to a recall. Recalls have an impact on market performance. Recalls ensure that the products released in the market are of good quality and do not show any danger to humans. Example of Defects Considered safety-related, accelerator controls that break or stick.
Recalls have impacts on the company; they ensure the company is keen on its vehicles. A company with no recalls will get a fair market compared to the one with numerous recalls. People avoid a company with many recalls because they consider it will cause danger to them.
References
Crafton, S. M., Hoffer, G. E., & Reilly, R. J. (1981). Testing the Impact of Recalls on the Demand for Automobiles. Economic Inquiry, 19(4), 694.