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Bot_Marvin t1_iuy1ayq wrote

Reply to comment by Ok_Frosting4780 in What factors contribute to gas prices? [OC] by USAFacts_Official

…. That’s what a cost is. A court side basketball ticket doesn’t cost more because the chair is super expensive, but because there are fewer of them, a higher price can be charged. Nearly every firm charges the most they are in a position to charge.

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Ok_Frosting4780 t1_iuycrk1 wrote

I agree. Firms charge whatever they think their clients are willing to pay. The person I was replying to implied that the price of refined oil increased because it became more costly to refine when in reality it's mostly caused by a predictable market reaction to contracting supply and expanding demand.

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Bot_Marvin t1_iuyepkb wrote

That’s very reasonable, I guess I just had a knee jerk reaction to similar wording used by people who believe rising gas prices are the result of “greed” as if firms suddenly became greedy haha.

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Wizard01475 t1_iuybg8a wrote

Great analogy. Really what this means is the refineries know they have the upper hand and are able to gouge any price they want. What I’m hearing is there is not enough competition.

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Bot_Marvin t1_iuybxd5 wrote

And I agree with you right there. More competition is very necessary.

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