Part of the issue is that the price is always in our
faces. What other industry puts their product's price
in huge letters on every street corner?!
rick
--- David Breneman <david_breneman@yahoo.com> wrote:
> --- Paul Hunt <paul.hunt1@blueyonder.co.uk> wrote:
>
> > There is no direct connection between wholesale
> oil price and
> > domestic
> > prices charged for energy. Like a dog licking its
> privates (it
> > does because
> > it can), while the energy companies can charge
> more for the latter
> > on a falling market for the former, they will.
>
>
> As would anyone in their position. People seek
> their maximum
> utility. Just as gasoline sellers want to keep the
> price high,
> gasoline purchasers want to keep it low. The market
> is always
> seeking an equilibrium between these two forces. As
> long as
> there isn't collusion in groups of sellers (cartels)
> or buyers
> ("windfall profits" taxes) the market will find that
> equilibrium.
> If the sellers push the price too high, they'll be
> stuck with
> tank farms full of unsold gasoline. If the buyers
> push it
> too low, they'll be faced with shortages as the
> price falls
> below the cost of production. Look at an analogy
> from your
> own life - suppose your boss called you in and told
> you the
> company was having a hard time finding new employes
> so he
> was going to give you a raise as an incentive to
> stay on.
> Would you say, "Oh heaven's no! I'm already
> charging too
> much as it is, and I'm sure you resent paying so
> much for me!
> I simply cannot accept the money, even though my MG
> needs
> a transmission rebuild and my kids need braces, I
> just
> can't accept another dime!" The chance of that
> scenario
> playing itself out would be... ?
>
>
> David Breneman david_breneman@yahoo.com
>
>
>
>
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>
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