Friday, June 01, 2007

Minnesota complicit in price gouging? 

The price of gas is too high because stations don't lower prices fast enough.

Despite popular misconceptions, price gouging almost never occurs as prices rise. Instead, price gouging occurs when dealers keep prices artificially high in order to gain a little extra profit or recoup costs, even though the DTW price has declined.

...Most people never notice true price gouging. They will complain that the price went too high, but that's the fault of the oil companies, not the dealers. Prices that stay high for too long go unnoticed. Just because the price of gas stays high does not mean that a dealer is price gouging. The price may actually be higher. That's why it's almost impossible to prove, let alone prosecute, price gouging.

In Minnesota you can't lower the price until you refill your storage tank. That's not gouging, then, that's protecting mom-and-pop gasoline retailers.

But even in the absence of such laws, Michael Giberson argues, price declines are slower because consumers aren't spending as much time searching.

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