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?
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?
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?
ReplyDeletehttp://mjperry.blogspot.com/2011/04/gasoline-taxes-per-gallon-vs-exxon.html
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?
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