A thought from across the pond,

hmmm $1.00 a gallon, I dream of paying less than £3.00 a gallon, hell that's
around $5 a gallon. However let's not loose sight that the US Gallon is
smaller than the UK gallon (Boy that makes me feel so much better :-(
perhaps we need a shortage !
Then again better not as it would only produce a reason to increase prices
further. I am not saying you should be grateful (far from it) one day I
intend to visit the US. Not just to see the sights and deliver lots of hard
earned cash into the 'Disney' regime but just out of curiosity, I want to
know what it feels like to fill up a car and pay less than $140.00 for that
privilege, that's what my receipt says for last night, and that was a cheap
petrol station !

Yours in poverty and despair (whilst still dreaming of that fabled $1.00 per
gallon)....

Gary Stephens
Windward Solutions Limited (UK)

-----Original Message-----
From: Mark Wonsil [mailto:[log in to unmask]]
Sent: 23 April 2001 23:41
To: [log in to unmask]
Subject: Re: OT: Gasoline prices and what consumers are doing about it


Ray Shahan wonders aloud:
>If there is a shortage at $1.00 per gallon, then why can I have all I want
>at $1.75 per gallon?

More accurately, you can have all you want as long as you have enough money
to buy it.  A shortage is the amount that demand outstrips supply and not an
absolute quantity.  If there was only ten ABBA records in the world and only
three people want them, then there is no shortage.  If there are five
million ABBA records and seven million people want them (and I'm not sure
why), then there would be a shortage of ABBA records.  Also, all demand is
local and distribution comes into play.  ABBA may not sell as many records
in the Mississippi Bayou as they do in New Jersey.  So I can have plenty of
ABBA records in Biloxi at a lower price than in a New York suburb.  Now,
back to gasoline.  As the price goes up, some will decide to walk, ride
their bike, take the bus, carpool or buy a more efficient car.  The demand
goes down, narrowing the shortage, so there is still some available to those
who want to pay the higher price.

>If there is truly a shortage, then why no rationing?

In a centrally planned economy, you would have rationing.  Rationing is just
another way to allocate a scarce resource.  Although history shows it can be
fraught with fraud and corruption and it usually lags the actual
demand/supply curve by months by the time the planners analyze the data.

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