Supply and Demand

[wordsmythe]

I've seen multiple articles recently that say they price of gas is up because of the cost of oil going up.

Ok, from what I remember of my econ classes, that seems reasonable.

But I can't just read and let it go so I have to think about what I've read and try to put it in terms I can easily digest. So, here's what came of that...

Let's say I take a photo and decide to prepare it for sale.

I spend $50 for the enlarged print and say $40 on some nice oak for a frame.

Then I spend a few hours cutting the wood, shaping it and forming the frame.

While it's drying I need to go buy some matt board for the photo for about $12 and glass for about $15.

Now I've got $117 in it NOT counting glue, V nails and hardware for a hanger.

Let's say I sell it for $200

I get $83 for taking the photo, adjusting it, sizing it, investing about 3 hours to make the frame, matt and glass.

OK a month later the person who bought it wants the same print and frame as a gift for a friend.

When I go to gather things for this project I find that the cost of paper for the print has doubled and the price of oak has also doubled.

Instead of the $90 I originally spent, I now have to spend $180.

Obviously, I can't take a $7 loss on it so I let the buyer know that the raw materials have increased in cost and I'm going to have to pass that along.

So I sell it to her for the original price plus the increase.

That means the buyer paid more but I made the same $83 for the effort.

Lets say that I tell the customer that there's another lumber store about 20 minutes away where I might get the wood cheaper and I go looking.

Maybe it's a little less expensive but I still have to pay for the time and gas it took to go check it out and things even out but no REAL savings and I still make that same $83

So with this in mind it begs the question... How can the oil companies tell me it's supply and demand that's driving my cost up and taking their profits up at the same time?

[KONQ RADIO]

One-third of the world is no longer content to ride a bicycle.

[wordsmythe]

One-third of the world is no longer content to ride a bicycle.

Bad dog no biscuit.

[Detector]

Well you do have a point.

I think it's more demand than supply. When Americans decide they can't afford to pay for gas it will stabilize. As long as we continue to pay it will go up.

Those oil CEO's have stockholders to make happy or loose their jobs.

[Tee]

I've seen multiple articles recently that say they price of gas is up because of the cost of oil going up.

Ok, from what I remember of my econ classes, that seems reasonable.

But I can't just read and let it go so I have to think about what I've read and try to put it in terms I can easily digest. So, here's what came of that...

Let's say I take a photo and decide to prepare it for sale.

I spend $50 for the enlarged print and say $40 on some nice oak for a frame.

Then I spend a few hours cutting the wood, shaping it and forming the frame.

While it's drying I need to go buy some matt board for the photo for about $12 and glass for about $15.

Now I've got $117 in it NOT counting glue, V nails and hardware for a hanger.

Let's say I sell it for $200

I get $83 for taking the photo, adjusting it, sizing it, investing about 3 hours to make the frame, matt and glass.

OK a month later the person who bought it wants the same print and frame as a gift for a friend.

When I go to gather things for this project I find that the cost of paper for the print has doubled and the price of oak has also doubled.

Instead of the $90 I originally spent, I now have to spend $180.

Obviously, I can't take a $7 loss on it so I let the buyer know that the raw materials have increased in cost and I'm going to have to pass that along.

So I sell it to her for the original price plus the increase.

That means the buyer paid more but I made the same $83 for the effort.

Lets say that I tell the customer that there's another lumber store about 20 minutes away where I might get the wood cheaper and I go looking.

Maybe it's a little less expensive but I still have to pay for the time and gas it took to go check it out and things even out but no REAL savings and I still make that same $83

So with this in mind it begs the question... How can the oil companies tell me it's supply and demand that's driving my cost up and taking their profits up at the same time?

You are SOOOOOOOOOO RIGHT Wordy!!!!!

You'd think that those greedy oil barons would be able to do with the same amount of profit despite the higher price at the pump. I agree 100%. The whole concept of them taking a "percentage" is unnecessarily greedy. They should be able to "do" with the same amount even though the price goes up right? The whole percentage thing seems unfair doesn't it?

Let's examine this whole percentage thing...

A flat amount would mean that they should be able to do with the same amount, regardless of what the price is at. That would seem fair right?

A percentage means that when the price goes up, so do the profits for the oil barons. That doesn't seem as fair, does it?

Now, a graduated percentage would be even worse. That would mean that the higher the price, the higher the percentage would be for the oil barons. The thought if this seems ludicrous doesn't it?

But you want it that way for the government.... Payroll taxes work this way. You want people to bequeeth more of their money to the government based upon the most unfair method, the graduated percentage.

It's okay when this happens to "rich" people....

But when it happens to wordy...well, that just ain't right!

[KONQ RADIO]

States wish they could get their tax scheme away from the tax per gallon and onto the percentage formula.

[Army_of_One]

Well said Tee...

[Army_of_One]

I've seen multiple articles recently that say they price of gas is up because of the cost of oil going up.

Ok, from what I remember of my econ classes, that seems reasonable.

But I can't just read and let it go so I have to think about what I've read and try to put it in terms I can easily digest. So, here's what came of that...

Let's say I take a photo and decide to prepare it for sale.

I spend $50 for the enlarged print and say $40 on some nice oak for a frame.

Then I spend a few hours cutting the wood, shaping it and forming the frame.

While it's drying I need to go buy some matt board for the photo for about $12 and glass for about $15.

Now I've got $117 in it NOT counting glue, V nails and hardware for a hanger.

Let's say I sell it for $200

I get $83 for taking the photo, adjusting it, sizing it, investing about 3 hours to make the frame, matt and glass.

OK a month later the person who bought it wants the same print and frame as a gift for a friend.

When I go to gather things for this project I find that the cost of paper for the print has doubled and the price of oak has also doubled.

Instead of the $90 I originally spent, I now have to spend $180.

Obviously, I can't take a $7 loss on it so I let the buyer know that the raw materials have increased in cost and I'm going to have to pass that along.

So I sell it to her for the original price plus the increase.

That means the buyer paid more but I made the same $83 for the effort.

Lets say that I tell the customer that there's another lumber store about 20 minutes away where I might get the wood cheaper and I go looking.

Maybe it's a little less expensive but I still have to pay for the time and gas it took to go check it out and things even out but no REAL savings and I still make that same $83

So with this in mind it begs the question... How can the oil companies tell me it's supply and demand that's driving my cost up and taking their profits up at the same time?

Wordy....do you think the oil companies set the price of oil? I don't thin they do.
Does OPEC Set Crude Oil Prices?

The oil companies would drill for more oil IF THEY COULD and refine more oil if they COULD. SOMEONE keeps them from doing it.....

[Craigb]

What stinks is that these same oil companies who keep raising the prices up, are reluctant to show the profits they have made! Last time I heard, for one quarter they showed a profit in the "BILLIONS" of dollars! That is, after everything is paid for by them, they show this kind of profit! What the hell? I just can't seem to help not feeling much pity for those poor stock holders who have to be on welfare just to get by! You know, because of the price of a gallon of gas etc.! Greed is a terrible thing, but when its "uncaring greed", that is when it becomes sinful! But, do you think people like this, care much at all? Probably not! Not at all!

[Tee]

Well said Tee...

Only problem is Army, he'll be unable to see the hypocracy. I know that pointing it out is a huge waste of time with him. He wont get it.