1. Describe the market for potatoes.

Is the market a monopoly, oligopoly, monopolistic

competition, or perfect competition? Defend your answer with sources. Use the text and make
sure you cover all the market characteristics (e.g., number of firms, interdependence, level of
advertising, etc.)

Potato markets are oligopolistic; a few market participants in the form of rural brokers, urban
brokers, and transporters have the market power. There are barriers to entry at the urban market
centers where brokers provide the link between wholesalers and retailers. Though there are
barriers to entry into the market, the barriers are only applied to urban brokers and transporters of
potatoes. The barriers are in the form of licenses and apply to any firm or person participating in
the market. This factor makes the market have many participants and supports the theory of a
perfect competition market.

2. How open is the market? How much do we export and import? Do Americans eat many
imported potatoes?

The government regulates the potato market. Although this is the case, regulations apply to
vendors of potato products, transporters, and rural and urban brokers. In this case, one can argue
that the potato market is open to entry and hence a free market. As long as a participant in the
market can meet the requirements of the government for the market, they are free to enter or
leave the market.

Exports

In 2020, the United States exported potatoes and potato products with a $3.0 billion value, down
1 percent from 2016. The United States exported 2.03 billion pounds of frozen fries in that
volume. The leading buyer of U.S. potatoes was Japan, followed by Canada, Mexico, and South
Korea. The United States also exported potatoes valued at $1.1 billion to these four countries
alone.

Imports

3.6 billion pounds of fresh and processed potatoes were imported in 2020, relatively unchanged
from 2019. Frozen fries weighed in at 111.9 million pounds, while fresh potatoes weighed at .94
million. Canada remained the main source of both fresh and frozen potatoes.

As shown by the imports of frozen fries, which are mostly canned, many Americans eat imported
potatoes. The figure for imported fresh potatoes stood at 3.6 billion pounds while for canned
French fries stood at almost 120 million pounds. This analogy depicts that, although many
Americans prefer locally produced potatoes and French fries, many prefer imported fresh
potatoes and associated products.

3. How are potatoes consumed in the U.S. – what form? Defend your answer with sources.

Only about one-third of U.S. potatoes are consumed fresh. Around 60 percent of annual output is
processed into frozen products (such as frozen french fries and wedges), chips, dehydrated potato
granules, flakes, and starch, while 6 percent is re-used as a seed potato.
4. How regulated is the market for potatoes? Defend your answer with sources.

The U.S. potato market is regulated. The government has established strict regulations that all
participants follow in the potato market. The government has also established agencies to control
the standards of fresh potatoes and the associated products. FOOD SAFETY AND QUALITY

U.S. potatoes offer unmatched quality, consistency, and variety. The U.S. potato industry relies
on experience and research to utilize the best production practices from seed to harvest. Certified
seed potatoes contribute to a healthier potato crop and help farmers reduce their ecological
impact. U.S. growers and certified agronomists take great care to monitor soil and crop needs.
Technological tools such as computerized Global Positioning Systems (GPS) ensure the sensitive
potato plants receive an optimum supply of moisture, nutrients, and air throughout the growing
period. Harvested potatoes are USDA inspected and graded to conform to official requirements
for their designated use.

Strict U.S. government oversight assures the safety and quality of U.S. potatoes from harvest to
consumption. The United States Department of Agriculture (USDA) enforces standards through
its Animal and Plant Health Inspection Service (APHIS), Agricultural Marketing Service (AMS),
and State Departments of Agriculture (SDA).

U.S. FRESH POTATO STANDARDS

After harvest, U.S. potatoes are carefully inspected. The USDA enforces quality standards
relating to potato size, shape, and defects. It issues a grade for each potato. Keeping the different
grades of potatoes separate ensures that purchasers receive the type and quality of potatoes they
have contracted.

U.S. PROCESSED POTATO STANDARDS

U.S. potatoes destined for processing are also sorted and graded under USDA oversight. To
ensure safety, every U.S. potato processor is closely regulated and monitored by inspectors from
the USDA and must meet the strict Hazard Analysis & Critical Control Points (HACCP)
requirements of the U.S. Food and Drug Administration. U.S. processing companies must also
comply with government product specifications for some frozen and canned potato products. The
U.S. is the only country globally that has mandatory government specifications for the quality
and length of frozen fries.

As established by the above argument, the United States Government has taken measures to
regulate the fast-food market industry, including the potato industry. The regulations put forward
by the various established regulatory boards are, therefore, a solution to the potato industry and
the market for other agricultural productions. All in all, one can truly understand why the
government regulates the potato market.

5. How much of the potato crop is turned into French fries? Defend your answer with sources.
35% of the potato crop is turned into French fries, 28% is used for fresh, and 13% goes to chips!
The Potato Museum in Washington DC contains 2000 potato artifacts. On average, U.S.
residents consume 110 pounds of potatoes per year. As established in the introductory part, the
usage of potatoes is widely accepted in the United States since it has many uses. As renowned
researchers and government agencies have established, due to Americans' love for French fries,
an outstanding percentage of 35% is turned to French fries and packaged or sold at local stores.

6. Go watch this http://www.youtube.com/watch?v=8uHxRwQqWFo and describe the point the

creators are trying to make in a paragraph.

The creators of the video make a point about the decomposition of French fries. As depicted by
the creators and proven by science, decomposition occurs over time. Although various firms in
the French fries market use advertisements for marketing their products to customers, it's good
for them to use viable marketing strategies and not lie to the consumer. MacDonald's is amongst
the established companies in the fast-food industry across the globe. It has used marketing
strategies to market its French fries, depicting that they do not decompose. This is a marketing
strategy that many consumers of MacDonald's French fries have fallen for. The video's main
point is that companies should use marketing strategies that will create a long-term relationship
between them and their clients, especially in the fast-food market (including the French fries
market).

7. Now go and Google "French fries don't decompose." What's the other side of the argument?

As a marketing strategy, companies and firms dealing with French fries have continuously
argued that French fries don't decompose. Our burgers, fries, and other menu items could
decompose in the right environment," McDonald's maintains. The company goes on to detail just
what kind of environment food needs to rot: "The reason our food may appear not to decompose
comes down to simple science." On the other side of the marketing strategy used by various
companies to market french fries, the truth is French fries will eventually decompose when not
stored in the right environment.

8. What do you expect to happen to the French fries in my office over time? Why?

Over time, the French fries stored in the office will eventually decompose. The decomposition
rate depends on factors such as the environment, the quality of the potatoes, the preparation
additives, and even the storage means, amongst many others. If the environment and storage
means are top-notch, the decomposition will happen at a lower rate and take longer. The French
fries will eventually turn moldy, emanate a vulgar stench, and not be for human consumption.
Science has explained all these arguments by showing that one cannot kill all bacteria, and since
bacterial organisms multiply, the French fries will be their source of food, a reason they will turn
moldy.

9. Should the French fry (and fast food market) market be more regulated? Why?

Health Issues have been raised about French fries (part and parcel of the fast-food market). Since
the regulations on the potato market are poorly addressed, many food vendors have turned to use
poor methods of preparation of French fries that disregard the health issues of customers. Due to
this, the government should establish more measures to regulate the French fry and associated
fast-food market. This measure will protect the public from being exploited by firms in the fast-
food market who risk the health of their customers to gain more profit.

10. What are the costs and benefits to the producer of more regulation? How about the
consumer?

The costs of the producer increase whenever more regulations are applied to a specific market.
More regulations mean more taxes and licensing procedures, which are additional costs to
producers. An example may be that if more transport regulations are established for transporting
potatoes, the transporters will have to pay more, increasing their expenditure. Although this
measure will increase the product's price, it is beneficial since it will reduce the number of firms
in a market and create customer satisfaction. In the long run, establishing more regulations in a
market is beneficial to producers.

To consumers, the pricing of the products they purchase will increase, which will affect their
savings and income. This analogy means that consumers will be negatively affected. But in
analyzing the scenario in the long run, customers will hugely benefit since they will buy quality
and standardized products that meet the established safety measures. All in all, additional
regulations are both advantageous and disadvantageous to producers and customers.