I appreciate Cowboy's take on this.
People talk about the inelastic demand for gas, but it's not...my city driving habits may change very little in the range of $0.50/L to $2.00/L, but my longer trips will certainly be affected at the higher range, and I'll make much more of an effort to share rides. If it takes a $0.20 price hike to reduce demand by 0.25%, that's the way it is. I'd prefer to pay extra than to have the gas supply run out.
The best argument I ever heard defending against the accusation of price-gouging was that the market operates precisely at the margin where the cost of entry to the industry can't be made up in profits in a reasonable time. If profits for gasoline retailers were as high as we'd like to believe, there would be competitive gas stations springing up everywhere.
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