Don't try to cut gas prices in Wisconsin

[Bill the Cat]

MERRILL, Wis. (AP) -- A service station that offered discounted gas to senior citizens and people supporting youth sports has been ordered by the state to raise its prices.

Center City BP owner Raj Bhandari has been offering senior citizens a 2 cent per gallon price break and discount cards that let sports boosters pay 3 cents less per gallon.

But the state Department of Agriculture, Trade and Consumer Protection says those deals violate Wisconsin's Unfair Sales Act, which requires stations to sell gas for about 9.2 percent more than the wholesale price.



Gas prices should be considered "Unfair sales" :ahem:

[Timothy Leary]

Yet another example of how big govt, not "big oil", is causing higher gas prices.

[Soyeong]

Well, the current price has a fixed minimum that is not at equilibrium. If one gas station lowers it’s prices, it generates more business and other gas stations will have to lower their prices as well in order to complete. Competing for the lowest price would cause many gas stations to go out of business, which would decrease the suppliers and cause prices to go back up. Even though it is a lot higher than you would like to pay, there are good reasons for it being that high.

[Crow]

Well, the current price has a fixed minimum that is not at equilibrium. If one gas station lowers it’s prices, it generates more business and other gas stations will have to lower their prices as well in order to complete. Competing for the lowest price would cause many gas stations to go out of business, which would decrease the suppliers and cause prices to go back up. Even though it is a lot higher than you would like to pay, there are good reasons for it being that high.

Soyeong, why should the government be able to tell a retailer how much of a profit (or how little) he is permitted to make?

If guy #1 can operate on a smaller profit margin because he runs his business more efficiently than guy #2, he should be getting the business. If guy #2 loses business because of this he outta be seeing what guy #2 does and do the same.

If guy #2 goes under, I'm sure guy #1 will be happy to service his former customers.

High prices because of high demand and low supply are one thing. But when the government decides that a station can't take less of a profit than it's competetor in order to increase it's share of the business, that's crazy. Utility companies, phone companies, and the rest compete for consumer business. They do it by either providing better service or by providing a better product, or by providing lower prices or discounts. Why should a gasoline selling business be different? Our utilities, phone service, and etcetera don't vanish unless we fail to pay the bill.

[Bill the Cat]

Well, the current price has a fixed minimum that is not at equilibrium. If one gas station lowers it’s prices, it generates more business and other gas stations will have to lower their prices as well in order to complete. Competing for the lowest price would cause many gas stations to go out of business, which would decrease the suppliers and cause prices to go back up. Even though it is a lot higher than you would like to pay, there are good reasons for it being that high.

That's week 1 economics, and excludes taxes, regulated prices, marginal costs, and discounts. Much more goes into setting a price than the basic supply and demand laws. Here is a basic chart on gas pricing and the difference between profit maximizing and equilibrium:

[$cirisme]

That's week 1 economics, and excludes taxes, regulated prices, marginal costs, and discounts. Much more goes into setting a price than the basic supply and demand laws. Here is a basic chart on gas pricing and the difference between profit maximizing and equilibrium:
Your chart is of a monopolistic market. See the difference between profit maximizing output and efficient quantity?

All those people are getting priced out of the market because it's a monopoly and not a competitive market.

This is why governments generally regulate monopolies.

[Timothy Leary]

Well, the current price has a fixed minimum that is not at equilibrium. If one gas station lowers it’s prices, it generates more business and other gas stations will have to lower their prices as well in order to complete. Competing for the lowest price would cause many gas stations to go out of business, which would decrease the suppliers and cause prices to go back up. Even though it is a lot higher than you would like to pay, there are good reasons for it being that high.

Alternatively, if consumers refuse to pay above a certain amount, buisnesses will be forced to do the same. That in turn, would force the suppliers to lower the prices or go out of buisness. This would create two things : first, cheaper gasoline prices; second, it would promote alternative energies.

Speaking of alternative energies, the way our country is going about it is all wrong.

Corn Ethanol is not worth the money being put into it, produces less than it costs to make, and is driving up our food prices.
We need to cut our tariffs on sugarcane and start importing it in hundreds of thousands of barrels. Sugarcane Ethanol is the best ethanol out there, and Brazil runs entirely on it.

Unfortunately, we lack the conditions to grow it as efficiently and cheaply. If we're to be serious about ethanol and cheaper fuel for our vehicles that is the way to go.
But, I have a feeling that our current congress will ignore it just as much as our last congress did, even though this one pretends to champion Brazil's system - while at the same time preventing that system from working in our own country.

All of this "oh no, the evil big oil companies!" nonesense is irrational. We have the lowest prices in the industrialized world.

About half of those costs are in taxes, which provide us with better roads - has anyone noticed that our roads are much better than they were in the 90s? That's because of increased tax revenue!

Furthermore, we keep driving at speeds that give our cars much worse gas mileage. Last decade the speed limit was at 55. Now, in a lot of areas, the speed limit is 75 - and drivers drive at 80-90. That is a very, very significant increase in wind resistance - which causes increased gasoline consumption.

Don't get me wrong - I am NOT advocating a return to the 55mph speed limit. I would hate such a thing. But, the power to significantly reduce your gas costs is already in your hands. Stop moaning, and do something about it ON YOUR OWN.

[Bill the Cat]

Your chart is of a monopolistic market. See the difference between profit maximizing output and efficient quantity?

All those people are getting priced out of the market because it's a monopoly and not a competitive market.

This is why governments generally regulate monopolies.

Actually, Cir, it is of a cartel arrangement where a few companies set the prices based on maximizing profits across the board. The formula was strange, but it worked out that if any single company tried to charge less, all profits would decline and total industry maximized profit would be less than if all had prices within the agreed upon price.

That's why I am not an economist... :no:

[Jimmy Higgins]

Yet another example of how big govt, not "big oil", is causing higher gas prices.
*WHACK!!!*

Do you even think before typing? A couple cents a gallon reduction gets taken away and somehow "Big government" is responsible for the $3.19 a gallon prices?

[Jimmy Higgins]

Gas prices should be considered "Unfair sales" :ahem:Well put that in the learned column. I wasn't aware that there was a fixed pricing for gasoline... ie 109.2% * wholesale cost*.

[Ryokan]

Big government, well at least big american government, and big oil have virtually no control over gas prices. The countries governments in OPEC, first world and Chinese/Indian demand, and a decrease in reserve growth account for the prices mostly.

[Jimmy Higgins]

Big government, well at least big american government, and big oil have virtually no control over gas prices.You mean other than controlling the available supply... which is why gas prices are skyrocketing to levels higher than we saw at Katrina. Of course, maybe demand really is too high now... and I'd personally like to thank all those drivers of Hummers on the highway... driving with a single person... amazingly, I don't recall seeing a Hummer with more than one person in it.

And of course, the prices of crude oil is market based, but that doesn't mean that it can't be manipulated by the powers that be.

[Ryokan]

You mean other than controlling the available supply... which is why gas prices are skyrocketing to levels higher than we saw at Katrina. Heck, BP restricted propane output for a few cents extra on the gallon and they were butchered for it. Even if the big oil companies were adding a few cents on they could not restrict supply enough for that. [QUOTE}Of course, maybe demand really is too high now... and I'd personally like to thank all those drivers of Hummers on the highway... driving with a single person... amazingly, I don't recall seeing a Hummer with more than one person in it. Prices would bump down if we all drove priuses, but power, not transportation is the big deal. And their have been refinery problems. Oil companies are very conservative, and until the last couple years the prices have been so low they stood to lose billions if they expanded refining capacity. So now all the refineries are over worked and it takes time to build new ones.

And of course, the prices of crude oil is market based, but that doesn't mean that it can't be manipulated by the powers that be.The powers that be in oil are OPEC, not us.

[Timothy Leary]

*WHACK!!!*

Do you even think before typing? A couple cents a gallon reduction gets taken away and somehow "Big government" is responsible for the $3.19 a gallon prices?

Ok, let's see here:

Big govt forces the company to charge more
Therefore, big government is responsible for the higher price

Simple logic. Of course, economic logic isn't the forte of communism.

[Jimmy Higgins]

Ok, let's see here:

Big govt forces the company to charge more
Therefore, big government is responsible for the higher priceThat's rather messed up logic. "Big government" keeps a place from lowering the gas price 3 cents per gallon. Meanwhile the price of gasoline has gone up around 33% in the past few months. So "big government" is responsible for the "higher price". No, "big government" would be responsible for the 1% of the 33% increase.

Simple logic. Of course, economic logic isn't the forte of communism.Neo, you really need to get an education.

Who's guilty of the gas prices?

1) Big Oil
2) Consumers
3) Government taxation of gasoline

Of course, gas taxes haven't increased since we've seen the near tripling at the gas pump in the past five to six years. What we have seen is instability in nations that have oil (nothing really new, though the Iraq Occupation has not helped) and now refineries can not keep up with demand thanks to a gluttonous American gasoline demand.

[Timothy Leary]

That's rather messed up logic. "Big government" keeps a place from lowering the gas price 3 cents per gallon. Meanwhile the price of gasoline has gone up around 33% in the past few months. So "big government" is responsible for the "higher price". No, "big government" would be responsible for the 1% of the 33% increase.

I never said this incident, alone, was the cause of our current gas prices, nor did I say that big govt alone was to blame for the current situation. In fact, I'm not complaining about the current gas prices at all - though they could be cheaper - I believe they are extremely beneficial for a few reasons

1) Americans are finally starting to change their gasoline habits
2) We're finally getting some of the 100mpg cars you can get in Europe
3) People are finally starting to look at alternative energies, even if they're going about a lot of it the wrong way.
4) Our roads are far superior to the roads we had in the 90s, thanks to the increased tax revenue from increased gas prices!

Neo, you really need to get an education.

We both need to stop making "holier than thou" comments like this. (that includes me as well)

Of course, gas taxes haven't increased since we've seen the near tripling at the gas pump in the past five to six years.

Do you remember C.D. Ward's thread on "price gouging"?

What we have seen is instability in nations that have oil (nothing really new, though the Iraq Occupation has not helped) and now refineries can not keep up with demand thanks to a gluttonous American gasoline demand.

There's something I can agree with.

[Teallaura]

Soyeong, why should the government be able to tell a retailer how much of a profit (or how little) he is permitted to make?
...Without looking into the Wisconsin law, I'm just addressing this in general. If you are talking about an even playing field you're correct. But the field isn't even. All a corporate company has to do is sell below cost until all the small fry are out of business and then they can set the prices anyway they please having created a monopoly in that market. That's why those laws were originated.

Now, whether or not they are going about their job in the best possible manner is another question all together.

Unless we are willing to eliminate corporations as legal entities (so that companies die with their owners) and change inheritance laws to prevent companies from being passed on for more than a generation or two, we're going to have to have some level of regulation to prevent monopolies from developing in that manner (and yes, the things I just mentioned are only stop gaps - they wouldn't prevent monopolies but would retard the growth. Personally, I'd just rather have some regulation - and one heck of a lot more oversight on the regulatory bodies!).

[Jimmy Higgins]

I never said this incident, alone, was the cause of our current gas prices, nor did I say that big govt alone was to blame for the current situation. In fact, I'm not complaining about the current gas prices at all - though they could be cheaper - I believe they are extremely beneficial for a few reasons

1) Americans are finally starting to change their gasoline habitsBased on the increase in prices recently, that would seem to be a false statement.
2) We're finally getting some of the 100mpg cars you can get in EuropeI applaud the Japanese Automotive industry for being a leader in this. Too bad the American Auto Industry is so far behind... again...
3) People are finally starting to look at alternative energies, even if they're going about a lot of it the wrong way.???
4) Our roads are far superior to the roads we had in the 90s, thanks to the increased tax revenue from increased gas prices!Care to demonstrate that? How did you even think you could claim that... oh wait... nevermind... I know your source for that claim... you use it a bunch. Regardless, according to the ASCE (http://www.asce.org/files/pdf/reportcard/methodologyandgrades.pdf), your claim doesn't seem to be true.

[Jimmy Higgins]

4) Our roads are far superior to the roads we had in the 90s, thanks to the increased tax revenue from increased gas prices!Funny article (http://news.yahoo.com/s/ap/20070520/ap_on_go_co/gas_tax_2;_ylt=AsWQRbUsgNzr8o1g3jQxDtNkM3wV) I read about this very issue.

Well, it's not really funny.
Two years ago, lawmakers proposed a 4-cent-per gallon boost in the fuel tax to finance a $375 billion highway bill. They backed off when President Bush (http://search.news.yahoo.com/search/news/?p=President+Bush) pledged to veto any road legislation with a tax increase. In the end, the spending plan came to $286 billion.
At the end of 2000, the highway trust fund had a balance of almost $23 billion. By the end of 2006, that balance had fallen to $9 billion.
The Congressional Budget Office (http://search.news.yahoo.com/search/news/?p=Congressional+Budget+Office) predicts the fund will run a deficit of $1.7 billion at the end of 2009 and $8.1 billion by the end of 2010, when the current highway program expires and Congress will write a new one.

Our infrastructure continues to grow old and the excise tax on gasoline (18.4 cents which was nearly 20% of the gas price in 1993, is now only about 7% of the price) remains constant.

[Timothy Leary]

Based on the increase in prices recently, that would seem to be a false statement.

Well, I didn't say everyone.
But even just reading these forums, you can read about how various users here are changing their habits to reduce their fuel consumption.

I applaud the Japanese Automotive industry for being a leader in this. Too bad the American Auto Industry is so far behind... again...

That's funny, I said European Cars, not Japanese.
I know of a few different Euro cars which will be here next year that get 100mpg (granted, though, they are smaller cars NOT designed for a family-size load)

Care to demonstrate that? How did you even think you could claim that... oh wait... nevermind... I know your source for that claim... you use it a bunch.

What the heck are you talking about? And how about you stop acting so condescending all the time?

Regardless, according to the ASCE (http://www.asce.org/files/pdf/reportcard/methodologyandgrades.pdf), your claim doesn't seem to be true.

Funny article (http://news.yahoo.com/s/ap/20070520/ap_on_go_co/gas_tax_2;_ylt=AsWQRbUsgNzr8o1g3jQxDtNkM3wV) I read about this very issue.

Well, it's not really funny.

Our infrastructure continues to grow old and the excise tax on gasoline (18.4 cents which was nearly 20% of the gas price in 1993, is now only about 7% of the price) remains constant.

In that case, I'm sorry for you, because the roads in my state are far superior than they were in the 90's. Sucks to be you.

[Jimmy Higgins]

Well, I didn't say everyone.
But even just reading these forums, you can read about how various users here are changing their habits to reduce their fuel consumption.The exception proving the rule?

That's funny, I said European Cars, not Japanese.
I know of a few different Euro cars which will be here next year that get 100mpg (granted, though, they are smaller cars NOT designed for a family-size load)Who's coming out with 100 mpg cars next year? Volkswagon presumably?

In that case, I'm sorry for you, because the roads in my state are far superior than they were in the 90's. Sucks to be you.Alright, so the ASCE says it isn't the case and this your response? The roads in your "state" have "far superior than they were in the "90s". And what state is that, denial?

[Timothy Leary]

The exception proving the rule?

No, like any other honest human being, I judge things based on my own experiences.

Who's coming out with 100 mpg cars next year? Volkswagon presumably?

Venture Vehicles, Smart USA, and a few others I think.
I'm not interested in the bigger vehicles, so I don't stay on tabs.

The roads in your "state" have "far superior than they were in the "90s". And what state is that, denial?

Why do you always act condescending?
It's really starting to get annoying. You sound like DE.

[Littlejoe9763]

Based on the increase in prices recently, that would seem to be a false statement.
I applaud the Japanese Automotive industry for being a leader in this. Too bad the American Auto Industry is so far behind... again...
???
Care to demonstrate that? How did you even think you could claim that... oh wait... nevermind... I know your source for that claim... you use it a bunch. Regardless, according to the ASCE (http://www.asce.org/files/pdf/reportcard/methodologyandgrades.pdf), your claim doesn't seem to be true.
Shhhhsh! (How else are we civil engineers supposed to make more money designing roads if everyone thinks there ok.):hehe:

[Jimmy Higgins]

No, like any other honest human being, I judge things based on my own experiences.Well, perhaps you should stick your head out the window more often and see what's going on.

Venture Vehicles, Smart USA, and a few others I think.
I'm not interested in the bigger vehicles, so I don't stay on tabs.I'll need to take a look at them. Though I'd personally be very wary of buying a vehicle from a very small company.

Why do you always act condescending?
It's really starting to get annoying. You sound like DE.I'm sorry if my lack of tolerance for your willful ignorance is bothering you. You haven't demonstrated anything about the roads in your "state" being any better. Just a vague reference of your experience, which is questionable as to the extent of that (if your age is accurate you were 4 in 1990 and 13 in 1999, so your impression of the public infrastructure may be a bit weak on authority).

You get a web page linked to the ASCE report card on civil infrastructure and you hand wave it as if the organization has absolutely no authority in the area, and continue referring solely to your "experience".

]Shhhhsh! (How else are we civil engineers supposed to make more money designing roads if everyone thinks there ok.):hehe:There isn't much wrong with the design. It's that these things don't last forever and/or that the "best" designs would be too expensive and problematic to use. Traffic loads have increased dramatically since some of these things were built in the first place (some stuff dating to the early 1900's!) meanwhile some sewers date to the early 1900's and even the late 1800's.

[Littlejoe9763]

There isn't much wrong with the design. It's that these things don't last forever and/or that the "best" designs would be too expensive and problematic to use. Traffic loads have increased dramatically since some of these things were built in the first place (some stuff dating to the early 1900's!) meanwhile some sewers date to the early 1900's and even the late 1800's.

One thing many people don't realize, is that (at least in my state), many new streets and roads, and many times, road improvements are paid for by the developer. If costs weren't kept reasonable, there would be little development. If too cheap there would be too much development.

[Jimmy Higgins]

One thing many people don't realize, is that (at least in my state), many new streets and roads, and many times, road improvements are paid for by the developer. If costs weren't kept reasonable, there would be little development. If too cheap there would be too much development.
This occured over on one of the jobs I worked on. It is a real hassle involving a developer, but the state usually has a problem saying no to free paid for improvements.

And in other cases a developer will cheap out on some stuff too. Like in Connecticut where the roads were terribly built with virtually no subgrade work at all. That cost the city a bit more to fix than they would ever have expected. Quite a sight seeing a reclaimer bounce in the air a few inches.

[Littlejoe9763]

This occured over on one of the jobs I worked on. It is a real hassle involving a developer, but the state usually has a problem saying no to free paid for improvements.

Free to them is ALWAYS a good thing!

And in other cases a developer will cheap out on some stuff too. Like in Connecticut where the roads were terribly built with virtually no subgrade work at all. That cost the city a bit more to fix than they would ever have expected. Quite a sight seeing a reclaimer bounce in the air a few inches.

Where were the inspectors on this job? Here we have to hire Geotechs to check the compaction every so many feet. (varies between state, county or local muni codes)

[Jimmy Higgins]

Where were the inspectors on this job? Here we have to hire Geotechs to check the compaction every so many feet. (varies between state, county or local muni codes)Privatish development.

I also doubt you have a geotechnical engineer checking the compaction. An inspector sure... but an engineer... unlikely... unless if was for something pretty big. Trust me, developers can be very evil.

[Timothy Leary]

Jimmy, if you're just going to be a jackass i'm not going to even bother with you.
I hate to break it to you, but you aren't the smartest person in the world.

But you go to prove the saying:

Liberals act like they're smarter than everyone
Conservatives act like they're more righteouss than everyone

Welcome to my ignore list.

[Jimmy Higgins]

Jimmy, if you're just going to be a jackass i'm not going to even bother with you.This post (http://www.theologyweb.com/campus/showpost.php?p=1965019&postcount=24) is acting like a *blank*? I thnk perhaps you think you have this "fresh" idealization of world... trying to be Mr. Middle of the Road, but honestly, you are just arrogent and willfully ignorant. Granted, I was twice as arrogent as you at your age, but no where near as ignorant. Today I'm twenty times as ignorant as I was back then... but then again that's only because I know more stuff. The more you learn, the more you know you don't understand.

Welcome to my ignore list.That's the willful part I was talking about. Enjoy your comfy bubble.

[Littlejoe9763]

Privatish development.

I also doubt you have a geotechnical engineer checking the compaction. An inspector sure... but an engineer... unlikely... unless if was for something pretty big. Trust me, developers can be very evil.

Well I don't actually go to the lab and make sure it's an Engineer doing the test, but we hire a geotech lab to do the compaction analysis down here. Developers can be evil or not. So can city employees/staff. Most of our work is with developers, so I'm a bit biased against most government staffs.