If we had it your way, last week the gas stations in Atlanta all would have run out of gas, and then the gas stations would not have been able to afford filling up their tanks.
If we had it your way, last week the gas stations in Atlanta all would have run out of gas, and then the gas stations would not have been able to afford filling up their tanks.
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Oh really? And how would have charging a fair price for gas made the situation any different? Nice try.
need to lift the government regs to build refineries and drill!
I also say, institute a Nimby tax on gas for states like cali and fla. This money would provide tax credit build refineries in other states.
Yes, tax INCREASE that foo likes!
I have to admit that my thinking on running a store or gas station is totally skewed after all these discussions on whether gas stations are gouging or not.
My understanding has always been that at the beginning of the week I buy the inventory that I plan to sell that week. My prices for that week are based on what my costs on buying that inventory was.
But sometimes it seems that it is suggested that the way it works is that at the beginning of the week I buy my inventory that I plan to sell that week. My prices for that week are based on what my costs on buying next week's inventory will or might be.
But since there's no way to know what my costs next week will be how do I determine what my prices this week should be to cover my costs next week? Do I call the supplier everyday and ask what the current costs would be even though I'm not buying and then price my products for that day on that information even though it is irrelevant for me since I will not be buying until next week? What if the cost of supply fluctuated during the week and I priced accordingly so that there was a rise in the middle of the week but by the time for resupply the cost went back down? Did I not raise my prices in the middle of the week for no reason according to the viewpoint of my customers?
I always thought that if my profit from this past week cannot cover my costs of stocking up for the next week then I either use credit and price accordingly or go out of business. I had imagined that most simply used credit and priced accordingly which is why you do not see wildly fluctuating prices. But prices might have a slight increase or even a decrease when a restock is done.
But it also seems to me that if you are supposed to do the latter method then only gas stations do it since there are the only ones that seem to have such fluctuating prices on their product. Prices of clothing and food do not fluctuate on a day to day, or even sometimes hour to hour, basis like gas does. I'm assuming food and clothing is priced according to the cost of putting it on the shelf and not the cost of replacing it.
Now, I could see that a gas station has to be different in determining prices than a grocery simply because of supply issues. Gas supply is extremely volatile because of stupidity of environmentalists since oil companies are not allowed to drill new locations nor build new refineries. But there's always a ready supply of milk because farmer's are allowed to breed new cows.
But I do have to say that there are examples of price gouging and some people just yell supply and demand! or basic economics! before looking at the situation being discussed. For instance, say two gas stations owned by two different people who receive their gas supplies from the same supplier. One guy sees the supply dwindling and charges 3 bucks a gallon. He sees the supply fluctuating so he slowly increases the prices by, say, 10 cents a gallon everyday. The other guy, on the other hand, charges 6 bucks right out of the gate and does not alter his pricing at all. I would have to say the second guy is attempting to gouge. Since he has competition it's not that big a deal because no one would buy from him. But he may be hoping that there would be a run on gas and that soon he'll have the only supply so he'll make killer profit. I would say that his charging that much right off will in fact help create that run on gas. In effect, his attempt at price gouging helps create the supply problem in the first place.
But pricing gas has so many factors involved such as supply, demand, refineries, taxes, stupid environmentalists, stupid politicians, stupid customers, OPEC, not true competitive market and more that it is near impossible to determine whether gas stations are following basic economics of supply and demand. I would say that most do not but it is not necessarily because of price gouging or profiteering. They do not simply because in some cases they cannot.
But that's just my opinion.
Exactly.