Re: International Pricing Policy

"Nick Hodges (CodeGear)" wrote:
I.P. Nichols wrote:

You assert as fact that "Costs have nothing to do with price" so
please explain the current situation where the price of gasoline
closely tracks the cost of crude oil. For myself I don't need no
economics to understand that it ain't just a happenstance :)

Sure -- Gasoline vendors charge as much as they can. Since gas is a
relatively /in/elastic item, they can fairly easily raise their prices
wihtout reducing profits.

But that doesn't explain the almost perfect correlation between the refiner's cost of crude oil and the price of gasoline.

If you break down the cost structure of gasoline into delivery, distribution, taxes, rents, refiner's operating costs, refiner's cost of crude oil, etc. you will see that the only really significant variable is the cost of crude oil while the other items tend to remain more or less fixed.

But none of this matters to an ideologue chanting his mantra that costs are irrelevant.


.

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