3 ms·
This is incorrect. If you have futures, your marginal cost is still $4, since now you're using an additional gallon instead of selling it at market price at $4
by ikeboy 7y ago
This is incorrect.
If you have futures, your marginal cost is still $4, since now you're using an additional gallon instead of selling it at market price at $4.
- refurb 7y agoThat's an opportunity cost, not an actual accounting cost.
- ikeboy 7y agoAccounting wise, the fact you made a profit on futures is unrelated to your current costs buying in the physical market. Most likely the futures in question aren't being physically settled. Regardless, the economic cost is what determines incentives to raise price for a rational actor. For my claim above to be wrong, Walmart and co would have to be irrational.