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To: Young Scholar

Why does it not bother you that 'big oil' has made huge profits on the back of the hurricane crisis? Do you consider this price gouging? If so, do you actually believe that consumers hold no purchasing power?

You have no idea what you are talking about, which makes me glad that you "as a consumer" have absolutely no power. The country would be a sad place if we gave people like you any say in things.

Why don't you explain yourself; your comment was vague.


7 posted on 10/28/2005 3:09:58 AM PDT by NVD
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To: NVD
Why does it not bother you that 'big oil' has made huge profits on the back of the hurricane crisis? Do you consider this price gouging? If so, do you actually believe that consumers hold no purchasing power?

Ok, so you don't hold no power, but no power to "ban the companies" you don't like.

As for the economics, of course profits are going to increase following a supply-disturbing hurricane (which is certainly not the main reason for this increase, since it didn't come until two months into the quarter), unless a company suffered severe losses to the hurrucane.

A) hurricane destroys small percentage of supply B) energy consumption is inelastic, meaning consumers can't significantly reduce consumption even if prices increase C) therefore, prices have to increase a significant amount before demand comes down to the slightly reduced supply D) companies are now selling nearly as much oil/gas as before (since supply disruption was small percentage of their total), but at significantly higher prices (and their production costs are roughly the same), meaning much higher profits.

It's not gouging; it's free market, and allowing it is the only way we'll avoid the shortages of the Carter years.

9 posted on 10/28/2005 3:19:46 AM PDT by Young Scholar
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To: NVD

I don't think that a whopping 10% profit margin is too terribly heinous.


57 posted on 10/28/2005 7:09:20 AM PDT by Texas_Jarhead
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