Is there a limit to gas prices?
by 
- M.C.S. - Dave
ANSWERS: 8
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I sure hope so, MCS. I can't take much more! I know NY is projecting prices in the $7 range this summer. *shrieks* Here in VA, I've heard $6! I'm staying home.... LOL
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No, there is no limit....and that's really scary!
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This is capitalism, my friend. There are only limits on prices if people refuse to pay.
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The only limit is that when the quantity (Price_per_gallon * Gallons_sold) decreases as they will charge the highest price they can without reducing demand too much. Capitalism. Supply and demand. The only limit is your willingness to pay. And if you are UNABLE to pay while others are both able and willing, that is not their problem due to Capitalism's inherent "survival of the fittest" mentality. Suppliers usually don't care who goes without so long as they get their money.
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There is a short-term price cap, actually, but it's horrible for the environment. It's possible to process coal in such a way that it performs similarly to oil. But as you can imagine: horrible for the environment, and the fixed costs are staggering. The only plus side is that we have lots and lots and lots of coal.
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The only limit occurs when people stop paying. As the saying goes: "I'll charge whatever they'll pay". So true for the gas industry. Take a basic economic class and you will realize that as long as no company 'rocks the boat' with low prices, everyone involved can enjoy high prices, high profits, and nice lives.
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its supply and demand. and what the economy can pay.
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That price where people can no longer afford to pay for gasoline and quite driving. When this happens the price will fall to a level where people again buy fuel. Side note: The oil used for fuel of all kinds is but a drop in the bucket to the amount of oil used to produce plastics. Fuel prices depend on inflation but are we also paying high prices because we are taking away from the oil used to produce plastic? High prices cause less fuel to be produced thus more oil to produce plastics. Don't believe it? Look at all the plastic, new and used, all around us!
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