Wednesday, June 22, 2011

Price of gasoline in America is approximately 2000% (thousand!) higher than the price of gasoline in Venezuela. What accounts for this gap?


  1. Great blog. However, one question: if oil companies "take advantage of the fact that gas is a necessity," why is a typical profit only 7 cents per gallon?

  2. Hey Doug- Great point! The market for gasoline is a very (if not perfectly) competitive market- there are too many companies to have a profit beyond a certain point because all the sellers are in competition. Also, the profit to companies may be 7 cents, but isn't it a possibility the government is also taking a large percentage of the revenue?