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Old June 7, 2012, 04:11 PM
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Galcobar Galcobar is offline
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Originally Posted by ipaine View Post
Yup damn gas companies. Nice how on the news they are talking about how the price of oil is slipping and not as high as it was and was expected to be, yet we are paying more at the pumps then we ever have. All the while the companies post record profits every quarter.

Now back on topic, a perfect example of where prices were and where they are now is a drive that I had purchased just shortly before the floods. I got a WD 3TB green and I paid $129.99 for it. Now from the same store for the same drive it is listed at $169.99 and that is $10 off. So really sticker price we are looking at a $50 increase, which works out to about a 38% increase.
The gas issue is not a problem with oil, which is more reasonably priced now that speculators are dropping out -- the problem is refinery capacity. As in, there isn't any, at least not where we need it to be. Oil companies have been closing refineries, or can't get the right type of oil to the right type of refinery (Alberta bitumen can't be processed by refineries set up for Texas sweet crude). It also doesn't help that the primary refinery for the West Coast, the Cherry Point refinery, is still largely offline due to a fire a few months ago.

I find myself wondering about profits versus profit margins on the hard drive side. Profit margins will of course go up when supply suffers a dramatic shock because demand doesn't go down. And even more obviously, prices will decline more slowly than they spiked because it takes a lot more time to rebuild a factory network than it does to flood them.

The corporation will favour increased profits over increased profit margins -- if volume is better for business they'll go for it.

As for protection, well, a) right-wing ideologies say government should not intervene in markets, and ignore the fact that ideology is based upon a non-existent ideal market and b) companies facing the same conditions will react the same way without need for collusion. And really, if one had the opportunity to increase their profits by selling more units at a lower price (undercutting the competition) they would -- collusion doesn't last because the incentive to cheat is great.
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