| Sidd Finch |
04-27-2006 07:33 PM |
Oh boy.
Quote:
Originally posted by Mmmm, Burger (C.J.)
if Safeway sets the prices of lettuce to be, say, $1, and Kroger is aware of that, and sets the price of its lettuce at $1, instead of 99c, that is not unlawful or a violation of the antitrust laws.
If OPEC effectively sets the world price of oil, and Exxon sells at that price too, they're not part of the cartel. Now, this isn't how things operate in the real world. In the real world, no one sets price for oil, they supply a quantity. OPEC keeps the price high by agreeing to limit quantities. Exxon as a result supplies *more* not less oil as a result than they would in the absence of the cartel because they can get a higher price for it than without the cartel.
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And, of course, Kroger will only reduce the price if it feels it can resell more lettuce that way, or if it is throwing away lettuce instead of selling it. In other words, as fringe says, "increase market share."
Exxon is selling as much oil as it can pump, as is everyone else. So no one has much incentive to cut prices. The only incentive is with the holders of the hugest reserves and who expect to be selling lots of oil many years from now -- mainly Saudi Arabia -- and the incentive is to prevent prices from going SO high that people actually start caring about effiency and alternative energy sources.
But even Saudi is pumping at pretty close to capacity, which limits its ability to reduce the market price.
I have no great concern about oil industry profits, or about gas prices. I have a great concern about tax breaks for oil companies, which have been increased over the past year and which were ludicrous then and more so now.
And, of course, I have concern about the Admin's view -- one it may now, perhaps, be regretting -- that energy efficiency (which Cheney derisively calls "conservation") is merely a "personal virtue" and not any appropriate part of an energy policy. |
