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Q: The gasoline stations in my area have increased their prices the same amount and at the same time. Is that price fixing? A: A uniform, simultaneous price ch
by NovemberWhiskey 5y ago
Q: The gasoline stations in my area have increased their prices the same amount and at the same time. Is that price fixing?
A: A uniform, simultaneous price change could be the result of price fixing, but it could also be the result of independent business responses to the same market conditions. For example, if conditions in the international oil market cause an increase in the price of crude oil, this could lead to an increase in the wholesale price of gasoline. Local gasoline stations may respond to higher wholesale gasoline prices by increasing their prices to cover these higher costs. Other market forces, such as publicly posting current prices (as is common with most gasoline stations), encourages suppliers to adjust their own prices quickly in order not to lose sales. If there is evidence that the gasoline station operators talked to each other about increasing prices and agreed on a common pricing plan, however, that may be an antitrust violation.
https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/dealings-competitors/price-fixing https://www.ftc.gov/advice-guidance/competition-guidance/gui...
- akrymski 5y agoIt's not about price increases, it's about the increase in profit margins. Oil prices can go up and down due to supply constraints but profit margins can remain constant.
- NovemberWhiskey 5y agoIf you're a producer (extractor...) of oil, and the price of oil goes up, then you're going to make more profit unless your costs went up too. Why would you keep selling for a lower price, when you have pricing power?
- lotsofpulp 5y agoAre these not constant enough? https://news.ycombinator.com/item?id=31272505 https://news.ycombinator.com/item?id=31272505 Surely there is some time allowance for extreme changes in supply and demand for margins to settle down again.