It's a Gas, Baby
Pop quiz:
You own a gas station. Your cost for gasoline is 4-6 cents cheaper than the price on your pumps. Congresscritters, in their infinite wisdom, declare a federal tax holiday, reducing wholesale and retail prices by 9 cents per gallon (which it won't, but let's just say it does).
Knowing, then, that you can purchase gasoline at a retail price today lower than your wholesale cost in six months, and that any "taxes" collected on the sale of stocks purchased during the tax holiday and sold after it go in your pocket, not to the government, what do you do?
What do you do?
Extra Credit: While you have your supply and demand curves out, show, also, the resultant effect on the equilibrium price of storage tanks and fuel trucks.
You own a gas station. Your cost for gasoline is 4-6 cents cheaper than the price on your pumps. Congresscritters, in their infinite wisdom, declare a federal tax holiday, reducing wholesale and retail prices by 9 cents per gallon (which it won't, but let's just say it does).
Knowing, then, that you can purchase gasoline at a retail price today lower than your wholesale cost in six months, and that any "taxes" collected on the sale of stocks purchased during the tax holiday and sold after it go in your pocket, not to the government, what do you do?
What do you do?
Extra Credit: While you have your supply and demand curves out, show, also, the resultant effect on the equilibrium price of storage tanks and fuel trucks.
Labels: gasoline, McCain, tax holiday