Exact(11)
In many cases, this reduces the net benefit of certifying enough to outweigh the certified price premium.
This effect reduces the certified price premium and makes certification less desirable for the producer.
Consequently, the certified price premium falls and the zone of certification shrinks.
When the consumer trusts the producer, the certified price premium will be reduced and is more likely to be overwhelmed by the negative aspects of certification.
As we have seen, a higher certified price premium makes certification optimal for the producer under a broader set of circumstances.
Lower standards will often decrease the certified price premium and/or reduce the producer's motivation benefit, making certification the less desirable choice.
Similar(49)
A producer who does not seek certification incurs no certification cost (δ = 0) and is certain to receive the non-certified price (θ = 0), so the net benefit of not certifying is mathrm{N}mathrm{e}mathrm{t} mathrm{benefit} mathrm{of} mathrm{not} mathrm{certifying}={P}_n-{gamma}_n+{M}_n.
Recently, the Senate Appropriations Committee passed a funding bill that would require the competitors to provide certified cost and pricing data for the final development phase of the commercial crew program, an odd and unnecessary provision in a competitive, fixed-price program.
As a result, there is not enough of a difference in price between certified and non-certified goods to justify the extra costs of certification.
Besides, the premium price for certified coffee is known as approximately 10 20% higher than the normal price.
These trade-offs are explored as a function of the nominal price of 'Certified Emission Reductions' or 'carbon credits'.
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