Higher input costs because of the rising price of fuel difficult for the smaller carriers to stay solvent in particular. Although consumers and airlines are unlikely to accept the level of regulation that existed prior to the 1970s, it is likely that the airline industry will have to be more heavily regulated in the future to provide safe, reliable, and efficient transportation to passengers. The structure of the industry has changed, consumers are more concerned about safe transport than before, and the world has changed, politically. Question

Multinationals can produce at economies of scale, driving down the cost of input and thus prices, an advantage for consumers. They tend to be more economically stable as a source of employment and also for investors. The international markets keep their eyes upon the performance of such mega-corporations, as barometers of economic performance. Also, in a global economy, facilitating relations between nations and treating other nations companies well is important diplomatically, to avoid trade wars. Finally, there is the fear that if mergers are not allowed, other nations in the developing world will use state-subsidized or less regulated industries to dominate the marketplace and gain a competitive advantage.

Question

We live in a global economy and it costs money, simply speaking, to transport food across state lines and to ship it around the globe. Food is primarily transported in trucks and ships that require diesel fuel, "which has hit records highs (in the U.S. over $4 per gallon)"...

Also, as more people all over the world demand more international and meat-based foodstuffs to satiate their palates, and local economies in the developing world are less self-sustaining than in the past because of political turmoil, the price of gas has more of an impact on food prices.
The shift in many farms to biofuel production, which deprives consumers of cheap corn and livestock of cheap feed has also driven up food prices. "According to a World Development Report authored by the World Bank, it takes 528 pounds of corn to fill the tank of one SUV. This same amount could feed one person for a year" (Markley 2008). As more and more corn and farmland is diverted to fuel production, it drives up the price of other foods. In short, there are many culprits, "including severe drought in certain regions and population growth in China and India" but the main source for the price pain at the grocery store is at the gas pump (Markley 2008).

Works Cited

Frank, Josh. (5 Jan 2004). "Coffee in the times of globalization." Countercurrents. Retrieved 26 Apr 2008 at http://www.countercurrents.org/glo-frank050104.htm

Markley, Stephen. (2008). "World food shortage linked directly to fuel."

Kicking Tires. Retrieved 26 Apr 2008 at http://blogs.cars.com/kickingtires/2008/04/world-food-shor.html

Siddiqi, Asif. "Deregulation and its consequences." U.S. Centennial of Flight

Commission. Retrieved 26 Apr 2008 at http://www.centennialofflight.gov/essay/Commercial_Aviation/Dereg/Tran8.htm