Gas price primer

From Rich Hailey, someone who actually took the time to understand why gas prices rise and fall. Via Instapundit.

Profit margins on the gasoline business are very slim. The profit margin on gasoline sales was only about 6 percent in 2006 (noted in that NPR article’s Bottled Water sidebar). That’s why you seldom see a gas station without a convenience store or Wal-Mart attached any more. Gasoline is the barely-above-cost incentive to get you to stop someplace where you’ll then hopefully buy a bunch of other stuff.

Wouldn’t it be nice if basic economic cause-and-effect phenomenon like this were taught in our schools? Then maybe people would be a bit less likely to jump to unwarranted conclusions about price-gouging every time supply disruptions or commodities trading drives prices up.

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