Originally Posted By: ZZman
Thats not true. I would think anything from 2.00-3.00 a gallon is reasonable. That is higher per barrel price then now. Just set a price and keep it there! I hate all the flucuation in price. It just went up to $ 2.39 here I see.
Make it worth drilling and pumping and make it good for the world economy.
There are very few cases where price caps, no matter who has imposed them, have worked (remember the price caps in the 1970's?).
"In case after case where price ceilings are imposed, virtually the same series of consequences ensues. . . . A persistent shortage develops because quantity demanded exceeds quantity supplied. . . . An illegal, or 'black,' market often arises to supply the commodity. . . . Investment in the industry generally dries up. Because price ceilings reduce the monetary returns that investors can earn, less capital will be invested in industries that are subject to price controls."
(William J. Baumol and Alan S. Blinder, Economics: Principles
And Policy, 1999, p. 83)
(emphasis added)