Anonymous
Anonymous asked in News & EventsOther - News & Events · 1 decade ago

Do you think this is really the answer to lowering gas prices?

This makes a lot of sense~ read to the end!!!

A man eats two eggs each morning for breakfast. When he goes to the grocery store he pays .60 cents a dozen. Since a dozen eggs won't last a week he normally buys two dozens at a time.

One day while buying eggs he notices that the price has risen to 72 cents. The next time he buys groceries, eggs are .76 cents a dozen.

When asked to explain the price of eggs the store owner says, "the price has gone up and I have to raise my price accordingly". This store buys 100 dozen eggs a day. I checked around for a better price and all the distributors have raised their prices. The distributors have begun to buy from the huge egg farms. The small egg farms have been driven out of business The huge egg farms sells 100,000 dozen eggs a day to distributors. With no competition, they can set the price as they see fit. The distributors then have to raise their prices to the grocery stores. And on and on and on.

As the man kept buying eggs the price kept going up. He saw the big egg trucks delivering 100 dozen eggs each day. Nothing changed there. He checked out the huge egg farms and found they were selling 100,000 dozen eggs to the distributors daily. Nothing had changed but the price of eggs.

Then week before Thanksgiving the price of eggs shot up to \$1.00 a dozen. Again he asked the grocery owner why and was told, "cakes and baking for the holiday".

The huge egg farmers know there will be a lot of baking going on and more eggs will be used. Hence, the price of eggs goes up.

Expect the same thing at Christmas and other times when family cooking, baking, etc.happen. This pattern continues until the price of eggs is 2.00 a dozen. The man says,"there must be something we can do about the price of eggs".

He starts talking to all the people in his town and they decide to stop buying eggs. This didn't work because everyone needed eggs. Finally, the man suggested only buying what you need.

He ate 2 eggs a day. On the way home from work he would stop at the grocery and buy two eggs. Everyone in town started buying 2 or 3 eggs a day.

The grocery store owner began complaining that he had too many eggs in his cooler.

He told the distributor that he didn't need any eggs. Maybe wouldn't need any all week.

The distributor had eggs piling up at his warehouse. He told the huge egg farms that he didn't have any room for eggs would not need any for at least two weeks.

At the egg farm, the chickens just kept on laying eggs. To relieve the pressure, the huge egg farm told the distributor that they could buy the eggs at a lower price.

The distributor said, " I don't have the room for the %\$&^*&% eggs even if they were free". The distributor told the grocery store owner that he would lower the price of the eggs if the store would start buying again. The grocery store owner said, "I don't have room for more eggs.

The customers are only buy 2 or 3 eggs at a time". "Now if you were to drop the price of eggs back down to the original price, the customers would start buying by the dozen again".

The distributors sent that proposal to the huge egg farmers. They liked the price they were getting for their eggs but, them chickens just kept on laying. Finally, the egg farmers lowered the price of their eggs. But only a few cents.

The customers still bought 2 or 3 eggs at a time. They said, "when the price of eggs gets down to where it was before, we will start buying by the dozen." Slowly the price of eggs started dropping.

The distributors had to slash their prices to make room for the eggs coming from the egg farmers. The egg farmers cut their prices because the distributors wouldn't buy at a higher price than they were selling eggs for.

Anyway, they had full warehouses and wouldn't need eggs for quite a while. And them chickens kept on laying.

Eventually, the egg farmers cut their prices because they were throwing away eggs they couldn't sell. The distributors started buying again because the eggs were priced to where the stores could afford to sell them at the lower price. And the customers starting buying by the dozen again.

Now, transpose this analogy to the gasoline industry.

What if everyone only bought \$10.00 worth of gas each time they pulled to the pump. The dealers tanks would stay semi full all the time. The dealers wouldn't have room for the gas coming from the huge tank farms.

The tank farms wouldn't have room for the gas coming from the refining plants. And the refining plants wouldn't have room for the oil being off loaded from

the huge tankers coming from the Middle East.

Just \$10.00 each time you buy gas. Don't fill it up. You may have to stop for gas twice a week but, the price should come down. Think about it.

As an added note...When I buy \$10.00 worth of gas,that leaves my tank a little under half full.

The way prices are jumping around, you can buy gas for \$2.65 a gallon and then the next morning it can be \$2.15.

If you have your tank full of \$2.65 gas you don't have room for the \$2.15 gas.

You might not understand the economics of only buying two eggs at a time but,

you can't buy cheaper gas if your tank is full of the high priced stuff. Also, don't buy anything else at the gas station, don't give them any more of your hard earned money than what you spend on gas, until the prices come down

Update:

I CAN'T TAKE CREDIT FOR THIS STORY...it was in an email I recieved. I AM JUST CURIOUS WHAT EVERYONE THOUGHT ABOUT THE IDEA OF IT.

Relevance

It's a nice thought, but no it wouldn't work. Gas stations make very little profit off of the gas and require the foot-traffic into their stores for other purchases (drinks, candy...). So, what would happen is that a good number of gas stations would ust go out of business and the remaining stations would have enough turnover from the increased business to keep sell enough gas to comphensate for the decrease in individual volume.

The only way to curb prices will be to find a cheaper alternative to nonrenuable natural resource to drive customer demand for towards that product. Inturn, the oil companies would then have to lower their prices to a competitive level to keep in line with the cheaper alternative.

Wonderful question!

• bran
Lv 5

The story may work for a small country, but the USA is too big. There is always people who commute way too far to work, too many latte drinkin yuppies, too many airplanes. My husband commutes to work 1 hour one way. We dont live in the big city. We live in Alaska, and the gas refinery is right down the street. The price is high here just the same as the other parts of the country, despite the fact that gas travels only a couple miles to the gas station. Of course lowering the prices will work. They are gouging us. It has nothing to do with the price of gas in other countries where its higher. There is no reason for the gas to be as high as it is now.

No. You'd have to assume that the number of drivers would never increase, and that ain't gonna happen. The only way to see a reduction in gas prices is....to not need it! Everyone knows oil is a finite energy source. Everyone knows OPEC can hang us out to dry on gas prices. Yet we set around waiting for the "next guy" to invent transportation that either doesn't use gasoline at all or a blended gas and whatever formula. Maybe instead of the stupid Internet petitions for a reduction in gas prices we should start screaming about alternative energy for transportation!

It's an interesting concept, but the biggest failing with it I believe is that most consumers don't have a way to stockpile fuel outside of their vehicle's tank. Since the average gas tank is sized relative (approximately) to the amount of fuel that the vehicle consumes, it means that somebody with average driving patterns (20km / yr) even on a full tank will need to refuel within a week anyhow.

The theory would work if you could convince people to drive less and actually consume less gas, but asking 21st century man to drive less (or car pool) is a lot like asking him to give up his \$5 Starbucks.

I applaud higher oil and gas prices because sadly it's the only way to have any impact at all on the types of vehicles people buy or the amount they drive. We live in an era where there are a number of viable alternatives to burning fossil fuel for energy and yet it seems that relying on conscience alone isn't enough. You have to hit people in their pocketbooks :-)

• Josh
Lv 4

good analogy..but unfortunately, while they may be selling less gas, the oil companies won't run into the same issues as their egg counterparts. Gasoline doesn't have the same shelflife as and egg, They will never run out of places to store the gasoline. It would be stored in the reserves of multiple nations, or they would cutback on refining, meaning less supply to match the lack of demand, maintaining the original cost, plus or minus a few cents.

These companies didn't get rich by being stupid, we have to think of ways around gasoline in order to beat the system.

• Anonymous

Could be if everyone would unite and only buy so much. However it is more like a dream to think of this. Because this is the USA where it is rare for someone to agree to do the same thing much less unite with their neighbors. They rather just pay the high prices and complain. Sad isn't it?

• Anonymous

i didnt even read the story, screw that, the price isnt going down because the government takes us as a bunch of retards, and its true! they have plenty of oil, theres no lack of oil or anything, to anyone reading this. and only buying 10 bucks per time u pull up to the tank wont help, it wont get you anywhere, thats like 3 gallons. THERE IS NO SOLUTION, THE GAS SELLERS HAVE GOTTEN US WHERE THEY WANT US, EVERYONE NEEDS GAS AND YOU CANT BUY GAS IN MODERATION LIKE EGGS, EGGS DONT GET YOU PLACES!!!!

good idea it seems, but unfortunately many people cannot get very far on \$10 worth of gas. People keep buying gas-guzzlers for some reason (over-compensation for something :]). that's why it wouldn't work. if everyone were driving the same car and it was economical then maybe.

My hand is tired from scrolling.But I will try to answer.

In my opinion,There is nothing that we Americans can do to bring down the gas prices.The only viable solution is to use less in order to protect your own budget.

The whole why's to this mess go back to the selling of the American family that they needed Suv's inorder to live.Which started several years ago.There is no need for me to try to go into any great detail here.It would serve no good purpose.