Because that was the motivation behind this law -- protecting retailers from predatory pricing.
So?
Huh? No one "controls" gas prices except for governments who sometimes set them.
Umm...maybe this should make you rethink the whole "war for oil" thing. It's a silly oversimplification.
ok..
1.what retailers would be getting protection under this law?
2.about the controlling the prices...thats exactly what i said...they dont want retailers setting gas prices. OUR government sets the Gas Price. OPEC is not allowed on U.S. Soil.
3.its not an over simplification. Its present day...look around you..it is peaceful here....not over there.
Very much so, yes. Small bookstores, hardware stores and grocery stores are fading fast. However, small Internet companies, home improvement service providers, and dietary consultants/providers are growing fast.
A mom and pop grocery store has no more of a right to the market than Wal-mart does. Consumers evaluate their choices and choose who gets their business. It's not complicated, nor is it a tragedy by default.
You're not wrong, really. You're just not looking at the full picture.
but i'm talking about retail ... and how it relates to this particular law ... if the law is set to protect the ma and pa gas stations - why aren't they protecting the bakers, grocery stores and hardware stores as well?
ok..
1.what retailers would be getting protection under this law?
Existing gas stations. They are being protected from typically larger operations that would move in and deliberately set prices below wholesale costs.
2.about the controlling the prices...thats exactly what i said...they dont want retailers setting gas prices. OUR government sets the Gas Price. OPEC is not allowed on U.S. Soil.
Our government does not set the gas prices, really. The world oil market, refineries, and retailers largely set prices with the government then getting involved with occassional price fixing and taxation. In other words, gas prices are largely determined by oil supply, consumer demand, and regulation.
3.its not an over simplification. Its present day...look around you..it is peaceful here....not over there.
:rolleyes:
Yet the majority of US oil comes from here. So the above doesn't make much sense.
The Middle East is an important region to the US because of oil. The reason for war, however, is much more complicated. I'm not justifying the war by any means, I'm just saying that the whole "war for oil" thing is kind of stupid when we had more control over Iraqi oil before the war than we do now.
but i'm talking about retail ... and how it relates to this particular law ... if the law is set to protect the ma and pa gas stations - why aren't they protecting the bakers, grocery stores and hardware stores as well?
Because bread, groceries and hammers aren't gas. As someone above indicated, these laws typically grew out of the gas price insanity in the 70s when people foolishly feared that selling gas would become an untenable business.
In the event that the United States experienced a perceived threat to its wheat supply, you'd see the same laws elsewhere.
Existing gas stations. They are being protected from typically larger operations that would move in and deliberately set prices below wholesale costs.
this is wrong economics and thats why this is not the reason for the law.
You are suggesting that a lone station in the desert sets gas prices at 5.00.
A gigantic BP moves in across the street and could set gas at 4.50 and of course get 100% of the customers.
This is false theory.
so the old store would eventually drop its price to 4.50 or be forced to raise the price to even more than 5.00 because it now gets 0 customers and is praying for one to come in..they would be run out of business.
The store would drop equal or lower to the new store setting up a market of competition immediately.
and under you theory these 2 companies would keep lowering prices to compete??
I DONT THINK SO.
why would 2 companies sacrifice what could be a great profit for both into nothing? THEY WOULDNT
this is wrong economics and thats why this is not the reason for the law.
Hehe...most laws are "wrong economics". A law's inconsistency with good economics is usually a proof of its existence, rather than the other way around.
You are suggesting that a lone station in the desert sets gas prices at 5.00.
A gigantic BP moves in across the street and could set gas at 4.50 and of course get 100% of the customers.
This is false theory.
so the old store would eventually drop its price to 4.50 or be forced to raise the price to even more than 5.00 because it now gets 0 customers and is praying for one to come in..they would be run out of business.
The store would drop equal or lower to the new store setting up a market of competition immediately.
and under you theory these 2 companies would keep lowering prices to compete??
I DONT THINK SO.
why would 2 companies sacrifice what could be a great profit for both into nothing? THEY WOULDNT
Hehe...they wouldn't? That's odd since gas stations all across America do this everyday. Certainly collusion exists in the market, and the idea of limitless competition involving an effectively non-renewable commodity is silly, but the gasolene market is certainly marked by inter-company competition.
Your idea here seems to imply that collusion would be the end-game of the market. That's silly because a colluding business only stands to access 50% of the market. If the margin on gas at $5 is $.50, but I only get 50% of the market, I'd happily take a $.40 margin to capture 80% of the market.
which is exactly why the price is going up...supply and demand plays no factor in this country on the price of gasoline.
What are you talking about? Gas price fluctuations are inextricably linked to supply and demand because gas prices are primarily a factor of oil prices and consumer demand. When oil supplies are threatened (like now), gas prices go up. When oil supplies are not threatened (like 10 years ago), gas prices go down. When consumer demand goes up (like now), gas prices go up. When consumer demand goes down (like this winter), gas prices go down.
What are you talking about? Gas price fluctuations are inextricably linked to supply and demand because gas prices are primarily a factor of oil prices and consumer demand. When oil supplies are threatened (like now), gas prices go up. When oil supplies are not threatened (like 10 years ago), gas prices go down. When consumer demand goes up (like now), gas prices go up. When consumer demand goes down (like this winter), gas prices go down.
what do you mean consumer demand... this isnt a factor when the govt determines the price per gallon in this country...OPEC does not set the prices for this country.. we buy barrels. than they are set in this country. there are no world economics to this...people from england are not moving here for cheaper gas.
the season thing is irrelevant and is still set by our goverment...in the summers here in orlando...gas goes up because of the tourism industry??
it doesnt go up because of a demand change...it goes up because it means more money during a 3 month period.
im saying this law is not meant to protect smaller companies... cause you could actually argue its meant to help bigger companies in the case of a Sams club...i can get all my gas for the same price as the little hindu guys store and buy a gallon jar of pickles and plasma tv in one trip...
are you making money off this..how can you argue against a government who is obviously making lots and lots of money off oil and giving none of the profits to the people of this country?
are you making money off this..how can you argue against a government who is obviously making lots and lots of money off oil and giving none of the profits to the people of this country?
This question makes no sense. How can I argue against a bad government? Seems pretty easy.
Furthermore, the government does give "profits to the people of this country". Those profits come in the form of gas that is currently selling at about 2/3s of its true market price.
what do you mean consumer demand... this isnt a factor when the govt determines the price per gallon in this country...OPEC does not set the prices for this country.. we buy barrels. than they are set in this country. there are no world economics to this...people from england are not moving here for cheaper gas.
Ugh.
First, OPEC doesn't determine ppb anymore. The oil exchange market in England does.
Second, our government does not "determine the price per gallon in this country". Sometimes governments will set fixed margins and prices, but for most part the price of gas is set by the exchange market.
the season thing is irrelevant and is still set by our goverment...in the summers here in orlando...gas goes up because of the tourism industry??
it doesnt go up because of a demand change...it goes up because it means more money during a 3 month period.
You just said the same thing two different ways. The reason increased demand increases prices is because the good has greater worth. So if the market will sustain a $5/gallon gas price in the summer, hell yes I'm going to charge that whereas in the winter I can only charge $4.
im saying this law is not meant to protect smaller companies... cause you could actually argue its meant to help bigger companies in the case of a Sams club...i can get all my gas for the same price as the little hindu guys store and buy a gallon jar of pickles and plasma tv in one trip...
You're just trying to invent a reason for this law to fit your preexisting opinions. The actual reason for this law is what you've been told 20 times here.
Well if the reason this law was put into place was to save smaller companies selling gas. Than can you agree its false... this law is not the reason small companies can sell gas...its the exact opposite ..and small independent convenient stores selling gas are now exclusive to lower class neighborhoods and struggle in middle class neighborhoods.
Okay, I have a question that I have heard and am wanting to learn more about.............So, all you economic and politic majors..........."Could a mass boycott of just one particular gas company, indefinately, have a positive effect on gas prices?" Or would that company just get bought out by the one selling all of the gasoline and stregnthen its monopoly?
Okay, I have a question that I have heard and am wanting to learn more about.............So, all you economic and politic majors..........."Could a mass boycott of just one particular gas company, indefinately, have a positive effect on gas prices?"
Only indirectly, and calculating the indirect economic effects of such a boycott would be kind of a crapshoot.
The best way to positively effect energy prices is to lower demand (stop driving) or invent alternatives (increase supply).
Only indirectly, and calculating the indirect economic effects of such a boycott would be kind of a crapshoot.
The best way to positively effect energy prices is to lower demand (stop driving) or invent alternatives (increase supply).
Okay, how many people boycotting would it have to take to lower the demand by a substantial amount if the companies boycotted were only companies importing oil from overseas? That would put some pressure up in other areas of government, and I know it's probably a rediculously high number of people...................any mathematicians out there?
And what would the residual damage be on inderect economics............long term, short term, depending on what?
Okay, how many people boycotting would it have to take to lower the demand by a substantial amount if the companies boycotted were only companies importing oil from overseas? That would put some pressure up in other areas of government, and I know it's probably a rediculously high number of people...................any mathematicians out there?
A boycott doesn't lower demand unless they're boycotting driving. Boycotting Exxon doesn't lower demand if you're just buying your gas at Shell.
To get a rough idea of pricing differences, simply look at historical consumption of gas relative to supply at that time. You could construct a rough relationship between supply and demand from there and then make computations to see what percentage of decreased consumption would lead to what percentage of decreased price. The measure would be far from perfect since gas is not perfectly supply/demand priced and the measure wouldn't account for oil supply turmoil and some post-oil production factors, but it would give you a basic idea.
And what would the residual damage be on inderect economics............long term, short term, depending on what?
Well, that's the problem. If, say, one of the major oil companies went out of business, monopolies would emerge, supplies could decrease and pricing could conceivably go up. I mean, the indirect effects would be very dependent on which company was involved. Furthermore, they would be locality-specific in a big way. Some areas would be affected different than others. Suffice to say that boycotting an oil company could have just an many negative effects as positive ones, vis a vis gas prices. Truly attacking the supply-side or the demand-side is a much better approach.
I'm not sure of the point you're making. Yes, in a commodity market the lowest price will win and that means the most efficient or capitalized operation will rule the market. However, how does this "sabatoge industry"? In the event that I push you out of the market, how is there less industry than there was before?
I don't understand your point here. Basically if seller A goes out of business because of seller B's prices, what's to stop seller B from doing it to all his concurrents until he has a monopoly? And once he has it, what's to stop him from practising ludicrous prices for which we all get to shut up since he is the only seller?
I don't understand your point here. Basically if seller A goes out of business because of seller B's prices, what's to stop seller B from doing it to all his concurrents until he has a monopoly? And once he has it, what's to stop him from practising ludicrous prices for which we all get to shut up since he is the only seller?
What was to stop seller A from doing that? The answer is futher competition. If seller B drives A,C,D,E&F out of business and then jacks up his prices to unacceptable levels, then seller G capitalizes on the new low-price market seller B has left behind.
A boycott doesn't lower demand unless they're boycotting driving. Boycotting Exxon doesn't lower demand if you're just buying your gas at Shell.
To get a rough idea of pricing differences, simply look at historical consumption of gas relative to supply at that time. You could construct a rough relationship between supply and demand from there and then make computations to see what percentage of decreased consumption would lead to what percentage of decreased price. The measure would be far from perfect since gas is not perfectly supply/demand priced and the measure wouldn't account for oil supply turmoil and some post-oil production factors, but it would give you a basic idea.
It would lower demand for imported oil though, ya see what i'm saying? You couldn't just go for any company and have much of an effect............but the right ones? Then you'd be decreasing consumption by a direct targeted market. We should probably try to push a few more big business monopoly laws through before such a venture................It would, if nothing else, be a massive attempt by the consumers to lower prices.............Which means a lot to poloticians with their hand in the cookie jar.
What was to stop seller A from doing that? The answer is futher competition. If seller B drives A,C,D,E&F out of business and then jacks up his prices to unacceptable levels, then seller G capitalizes on the new low-price market seller B has left behind.
Exactly!
not to mention it might make sellers a,c,d,e&F invest in a new kind of resource.........................maybe that's just wishful thinking, they'll probably take their money and run.
What was to stop seller A from doing that? The answer is futher competition. If seller B drives A,C,D,E&F out of business and then jacks up his prices to unacceptable levels, then seller G capitalizes on the new low-price market seller B has left behind.
But if seller B has the financial and legal capacities can't he just continue to put sellers out of business as to protect his monopoly?
I don't understand your point here. Basically if seller A goes out of business because of seller B's prices, what's to stop seller B from doing it to all his concurrents until he has a monopoly? And once he has it, what's to stop him from practising ludicrous prices for which we all get to shut up since he is the only seller?
Because they would still want to make money and have investors to please. They would HAVE to stay in the industry some way. Whether it be forming seller G or by some other means.
But if seller B has the financial and legal capacities can't he just continue to put sellers out of business as to protect his monopoly?
What would Seller B pull them out of business with? New, more efficient technology? Because that is what the other companies know the public wants at that point..............Even better, the technology is already out there, all they have to do is invest in it. I think it would speed up the people trying to patent new technology.
It would lower demand for imported oil though, ya see what i'm saying?
It's not that simply, unfortunately. Oil is a commodify. Whether imported or not, there's not much difference in the value of the actual oil.
You couldn't just go for any company and have much of an effect............but the right ones?
I'm not sure what that "right one" would be, or how it would lower prices.
Then you'd be decreasing consumption by a direct targeted market.
How? The commodity at hand isn't "Exxon" or "Shell". The commodity is gas. And if the boycott doesn't affect the consumption of gas, then it won't work.
We should probably try to push a few more big business monopoly laws through before such a venture................
Hehe...what??? What would that accomplish, other than forcing your boycotters to then subsidize the existence of what they're boycotting?
It would, if nothing else, be a massive attempt by the consumers to lower prices.............Which means a lot to poloticians with their hand in the cookie jar.
Yeah, and that sucks. The "massive attempt" should be a national oil consumption strike. No consumption of gas. That could affect some massive changes. You can't have your cake and eat it too, unfortunately.
It's not that simply, unfortunately. Oil is a commodify. Whether imported or not, there's not much difference in the value of the actual oil.
I'm not going to assume that it would actually lower gas prices..........in fact just the opposite for a pretty long time actually. But it would effect the income of particualar businesses...........long story short, it would kind of force a boycott of gasoline all together............Seriously, prices go up too much more, I won't be able to afford it ............or :(
I'm not sure what that "right one" would be, or how it would lower prices.
The ones that a consensus comes up with.
"How? The commodity at hand isn't "Exxon" or "Shell". The commodity is gas. "
It does effect the revenue of "Exxon" or "Shell"..........making it a much more espensive comodoty having to sell more or raise prices...........How many investors would sell if they knew there was going to begin a national public boycott of their Business in a year to the date from now?
"Hehe...what??? What would that accomplish, other than forcing your boycotters to then subsidize the existence of what they're boycotting?"
That would completly depend on the wording of the new bill.
"Yeah, and that sucks. The "massive attempt" should be a national oil consumption strike. No consumption of gas. That could affect some massive changes. You can't have your cake and eat it too, unfortunately.[/quote]
That could happen..............probably sooner than not. Some people are feeling some heavy financial pressure because of the gas prices...........as well as businesses.
Comments
ok..
1.what retailers would be getting protection under this law?
2.about the controlling the prices...thats exactly what i said...they dont want retailers setting gas prices. OUR government sets the Gas Price. OPEC is not allowed on U.S. Soil.
3.its not an over simplification. Its present day...look around you..it is peaceful here....not over there.
but i'm talking about retail ... and how it relates to this particular law ... if the law is set to protect the ma and pa gas stations - why aren't they protecting the bakers, grocery stores and hardware stores as well?
Existing gas stations. They are being protected from typically larger operations that would move in and deliberately set prices below wholesale costs.
Our government does not set the gas prices, really. The world oil market, refineries, and retailers largely set prices with the government then getting involved with occassional price fixing and taxation. In other words, gas prices are largely determined by oil supply, consumer demand, and regulation.
:rolleyes:
Yet the majority of US oil comes from here. So the above doesn't make much sense.
The Middle East is an important region to the US because of oil. The reason for war, however, is much more complicated. I'm not justifying the war by any means, I'm just saying that the whole "war for oil" thing is kind of stupid when we had more control over Iraqi oil before the war than we do now.
Because bread, groceries and hammers aren't gas. As someone above indicated, these laws typically grew out of the gas price insanity in the 70s when people foolishly feared that selling gas would become an untenable business.
In the event that the United States experienced a perceived threat to its wheat supply, you'd see the same laws elsewhere.
Hehe...most laws are "wrong economics". A law's inconsistency with good economics is usually a proof of its existence, rather than the other way around.
Hehe...they wouldn't? That's odd since gas stations all across America do this everyday. Certainly collusion exists in the market, and the idea of limitless competition involving an effectively non-renewable commodity is silly, but the gasolene market is certainly marked by inter-company competition.
Your idea here seems to imply that collusion would be the end-game of the market. That's silly because a colluding business only stands to access 50% of the market. If the margin on gas at $5 is $.50, but I only get 50% of the market, I'd happily take a $.40 margin to capture 80% of the market.
What are you talking about? Gas price fluctuations are inextricably linked to supply and demand because gas prices are primarily a factor of oil prices and consumer demand. When oil supplies are threatened (like now), gas prices go up. When oil supplies are not threatened (like 10 years ago), gas prices go down. When consumer demand goes up (like now), gas prices go up. When consumer demand goes down (like this winter), gas prices go down.
what do you mean consumer demand... this isnt a factor when the govt determines the price per gallon in this country...OPEC does not set the prices for this country.. we buy barrels. than they are set in this country. there are no world economics to this...people from england are not moving here for cheaper gas.
the season thing is irrelevant and is still set by our goverment...in the summers here in orlando...gas goes up because of the tourism industry??
it doesnt go up because of a demand change...it goes up because it means more money during a 3 month period.
im saying this law is not meant to protect smaller companies... cause you could actually argue its meant to help bigger companies in the case of a Sams club...i can get all my gas for the same price as the little hindu guys store and buy a gallon jar of pickles and plasma tv in one trip...
This question makes no sense. How can I argue against a bad government? Seems pretty easy.
Furthermore, the government does give "profits to the people of this country". Those profits come in the form of gas that is currently selling at about 2/3s of its true market price.
Ugh.
First, OPEC doesn't determine ppb anymore. The oil exchange market in England does.
Second, our government does not "determine the price per gallon in this country". Sometimes governments will set fixed margins and prices, but for most part the price of gas is set by the exchange market.
You just said the same thing two different ways. The reason increased demand increases prices is because the good has greater worth. So if the market will sustain a $5/gallon gas price in the summer, hell yes I'm going to charge that whereas in the winter I can only charge $4.
You're just trying to invent a reason for this law to fit your preexisting opinions. The actual reason for this law is what you've been told 20 times here.
Only indirectly, and calculating the indirect economic effects of such a boycott would be kind of a crapshoot.
The best way to positively effect energy prices is to lower demand (stop driving) or invent alternatives (increase supply).
And what would the residual damage be on inderect economics............long term, short term, depending on what?
A boycott doesn't lower demand unless they're boycotting driving. Boycotting Exxon doesn't lower demand if you're just buying your gas at Shell.
To get a rough idea of pricing differences, simply look at historical consumption of gas relative to supply at that time. You could construct a rough relationship between supply and demand from there and then make computations to see what percentage of decreased consumption would lead to what percentage of decreased price. The measure would be far from perfect since gas is not perfectly supply/demand priced and the measure wouldn't account for oil supply turmoil and some post-oil production factors, but it would give you a basic idea.
Well, that's the problem. If, say, one of the major oil companies went out of business, monopolies would emerge, supplies could decrease and pricing could conceivably go up. I mean, the indirect effects would be very dependent on which company was involved. Furthermore, they would be locality-specific in a big way. Some areas would be affected different than others. Suffice to say that boycotting an oil company could have just an many negative effects as positive ones, vis a vis gas prices. Truly attacking the supply-side or the demand-side is a much better approach.
I don't understand your point here. Basically if seller A goes out of business because of seller B's prices, what's to stop seller B from doing it to all his concurrents until he has a monopoly? And once he has it, what's to stop him from practising ludicrous prices for which we all get to shut up since he is the only seller?
What was to stop seller A from doing that? The answer is futher competition. If seller B drives A,C,D,E&F out of business and then jacks up his prices to unacceptable levels, then seller G capitalizes on the new low-price market seller B has left behind.
not to mention it might make sellers a,c,d,e&F invest in a new kind of resource.........................maybe that's just wishful thinking, they'll probably take their money and run.
But if seller B has the financial and legal capacities can't he just continue to put sellers out of business as to protect his monopoly?
It's not that simply, unfortunately. Oil is a commodify. Whether imported or not, there's not much difference in the value of the actual oil.
I'm not sure what that "right one" would be, or how it would lower prices.
How? The commodity at hand isn't "Exxon" or "Shell". The commodity is gas. And if the boycott doesn't affect the consumption of gas, then it won't work.
Hehe...what??? What would that accomplish, other than forcing your boycotters to then subsidize the existence of what they're boycotting?
Yeah, and that sucks. The "massive attempt" should be a national oil consumption strike. No consumption of gas. That could affect some massive changes. You can't have your cake and eat it too, unfortunately.
What "financial and legal capacities" are you talking about?
I'm not sure what that "right one" would be, or how it would lower prices.
The ones that a consensus comes up with.
"How? The commodity at hand isn't "Exxon" or "Shell". The commodity is gas. "
It does effect the revenue of "Exxon" or "Shell"..........making it a much more espensive comodoty having to sell more or raise prices...........How many investors would sell if they knew there was going to begin a national public boycott of their Business in a year to the date from now?
"Hehe...what??? What would that accomplish, other than forcing your boycotters to then subsidize the existence of what they're boycotting?"
That would completly depend on the wording of the new bill.
"Yeah, and that sucks. The "massive attempt" should be a national oil consumption strike. No consumption of gas. That could affect some massive changes. You can't have your cake and eat it too, unfortunately.[/quote]
That could happen..............probably sooner than not. Some people are feeling some heavy financial pressure because of the gas prices...........as well as businesses.
convenient stores are the ones competing