On Sat, 06 Sep 1997 21:09:14 EDT mgbob@juno.com (ROBERT G. HOWARD)
writes:
>
>On Sat, 06 Sep 1997 17:01:40 EDT gofastmg@juno.com (Rick Morrison)
>writes:
>>
>>On Sat, 06 Sep 1997 09:01:17 -0400 Kai Radicke <mowogmg@pil.net>
>>writes:
>
>>>
>>No kai you wouldn't control the prices. You only control the supply.
>> The price is set when and only when you sell. not before.
>
>Yes, that's the classic situation I learned in Eco, but there must be
>other factors at work also. I'm thinking of this summer's price runup
>in gasoline, which is currently $1.56 (US, 4-qt gallon) here in
>Connecticut. There isn't a shortage--we can buy all we want, yet the
>suppliers say the supply is tight because of plant shutdowns for
>maintenance, etc. Do they not shut these plants routinely for
>maintenance? One assumes that summer must be a good time for the
>work--one hopes that it's not to cause an artificial shortage.
>Another theory that I learned was that the unit cost decreases as
>volume of product increases. Should we conclude that a summer shutdown
>of a plant causes the unit price of gasoline from other plants to
>increase?
>The producers must certainly be aware that there are more vehicles on
>the road during the summer. One of the producer representatives,
>talking on CT Public Radio yesterday morning, attributed the price
>increase to the larger number of SUVs careering down the highways, yet
>the producers have access to the same auto sales reports that the rest
>of us do.
>I don't know the answer to this, but the explanation can't be as pat
>as supply/demand.
>Bob
Bob,
Your absolutely correct, there is a LOT more to markets and pricing
than the simplistics of supply and demand.
But to go into all of them, would take about as much time as I spent
getting my degree in Economics and Finance.
Suffice to say, that I gave a very simplistic answer to an obsurd
sceanerio.
In the example you quoted as to gasoline prices, I have often wondered
and by now am pretty well convinced, that the so called "shortages" are
not artificial. I don't know about your area of the country, but it seems
around here in the sunny South that every time there is a major holiday
whereby more people will be traveling, there is another "temporary
shortage" of supply, and UP go gas prices.
Oh well, If I had all the answers, I could sit back and watch the money
roll in, instead of going out to work for it.
Rick Morrison
72 MGBGT
74 Midget
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