Saturday, September 02, 2006

Coworkers theory

My boss is not a supporter of hybrids or technologies that reduce the amount of gas that America uses. He wants a complete end to end solution, such has fuel cells, not patches on the current state of things.

His reasoning is that as oil and gas consumption is lessened the price of gas will actually go up because as the oil companies lose money, they will raise the price of gas to make up for the loses. Is there anyway for this to happen, without illegal activity, assuming supply stays at its current level?

I actually think it is possible, if for some reason that alternatives to gas are only sold in some parts of the country and not others. The areas without options, will see the price of gas rise. If the government stays out of it though, it lessens they chance of that happening.

There is also the fact is that oil companies are heavily invested in new forms of energy and probably will still be making money off of you, though not from gas.

Are there any cases of commodities not following the supply demand curve when the market has been allowed to work?


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