Quote:
Originally Posted by Cowboy89
The CCPA fails to understand the concept of Supply/Demand and only looks at a 'costplus' methodology. All that tells you is where the oil companies make more profit and not what price keeps a reliable supply at the service station. As I've mentioned many times in this thread the price is not simply costs plus a percentage profit. It is what price demand is willing to pay (Just like any other good or service).
|
But doesn't the traditional supply and demand model also require a competitive free market? If this is the case, then wouldn't the oil and gas industry fall under a more non-traditional curve, especially since the cost of the raw material is an industry constant (and easily influenced by future speculation)?