the story goes like this...
in a remote town, there was a trader who sold only one product - eggs. all the town's people went to him for their supply of eggs. they would normally buy for their weekly needs as this was convenient for them.
the trader, realizing that he had a monopoly on the eggs trade, decided to increase the price of eggs slightly. the town folks did not mind as the difference was not much. they still kept buying their weekly needs.
the trader seeing that his profits were growing, decided to stock up more eggs and increased the price even higher. now the people paused and looked at the trader's action carefully. they realized that their silence over the first price increase had prompted the trader to further hike up the price.
being simple people, they decided to take a simple action to teach the trader a lesson. they did not boycott the trader as they needed eggs. so what they did was instead of buying their weekly supply, they decided to buy on a daily need basis.
this resulted in the trader having to carry a higher stock of eggs. if he did not sell them off on time the eggs would go bad. as his stock of eggs piled up, he had only one option to clear his stock before all the eggs went bad. he had to lower the price.
the trader learned his lesson and reverted to the original price.
now why can't you and i fill up our fuel tanks for what we need on a daily basis? yes this will be inconvenient but think what this will do - the petrol stations will be sitting on high stock. they will be sending out their replenishment orders much slower that they presently do. the refineries will be holding too much stock - probably not enough storage tanks. there will be a glut of petrol. the price has to come down.
the profiteers, futures traders who are the prime culprits for the price escalation will be punished just like the egg trader.
the egg story is something that i read in an e mail some time back. the simple logic of this story stuck in my mind. just ponder what if the world over, people just filled up according to their daily needs instead of filling up the tank, what would be the effect on oil prices?
cheers.
in a remote town, there was a trader who sold only one product - eggs. all the town's people went to him for their supply of eggs. they would normally buy for their weekly needs as this was convenient for them.
the trader, realizing that he had a monopoly on the eggs trade, decided to increase the price of eggs slightly. the town folks did not mind as the difference was not much. they still kept buying their weekly needs.
the trader seeing that his profits were growing, decided to stock up more eggs and increased the price even higher. now the people paused and looked at the trader's action carefully. they realized that their silence over the first price increase had prompted the trader to further hike up the price.
being simple people, they decided to take a simple action to teach the trader a lesson. they did not boycott the trader as they needed eggs. so what they did was instead of buying their weekly supply, they decided to buy on a daily need basis.
this resulted in the trader having to carry a higher stock of eggs. if he did not sell them off on time the eggs would go bad. as his stock of eggs piled up, he had only one option to clear his stock before all the eggs went bad. he had to lower the price.
the trader learned his lesson and reverted to the original price.
now why can't you and i fill up our fuel tanks for what we need on a daily basis? yes this will be inconvenient but think what this will do - the petrol stations will be sitting on high stock. they will be sending out their replenishment orders much slower that they presently do. the refineries will be holding too much stock - probably not enough storage tanks. there will be a glut of petrol. the price has to come down.
the profiteers, futures traders who are the prime culprits for the price escalation will be punished just like the egg trader.
the egg story is something that i read in an e mail some time back. the simple logic of this story stuck in my mind. just ponder what if the world over, people just filled up according to their daily needs instead of filling up the tank, what would be the effect on oil prices?
cheers.
1 comment:
Telor setengah masak dua, horlicks ais 1
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