Question

HELP!! Worth 94 Points! 1. The owner of a new restaurant in California had trouble getting customers to comply with the state's smoking ban. The fine for a first violation is $100. A second violation carries a fine of $200, and third and subsequent violations cost $500 each. After a third violation within one year, a representative of California's Occupational Safety and Health Administration is required to investigate complaints. Employers may be cited with fines up to $7,000 for violations classified as general or serious, and fines up to $70,000 for violations classified as willfully serious. Last year, in the first year in operation, the restaurant owner had four violations, plus a violation for a serious offense that may or may not have been willful.
A. What are the minimum and maximum amounts that the owner would have paid in fines?

B. How do these government actions protect consumers?

2. A vitamin company, Pro Health (PH), was preparing to launch a new product called ProBio. It had produced 20,000 units of ProBio at a cost of $5 per unit and had packaged the product in bottles with labels that prominently displayed the ProBio name. At the last minute, PH learned that an established drug company already sells a product named ProBio. FDA regulations prohibit drugs with identical names from being sold on the market, with the penalty for noncompliance being full product recall. Rather than face product recall, PH decided to comply with the regulation voluntarily. As a result, the product had to be renamed and rebranded, the label had to be redesigned, and a new advertising campaign had to be formulated and launched. What were the likely outcomes of this decision? What might have happened if the company had not voluntarily changed its product?

Answer 1

A. Minimum fine would be $1300 (100+200+500+500) to max of $71,300 (100+200+500+500+70,000)

B. Lowering second hand smoke in locations can lower negative health effects that tend to go along with second hand smoke.

2. The FDA has laws in place that make it illegal to use the same name. If they choose to go forward they will get fined and most likely sued by the other company and the other company will most likely win.