June 29, 2011

Business for fun and profit

Let's say you have a business that produces widgets. You lose, for whatever reason, your largest customer. Your business is reduced by 20%. Would it be a surprise if you raised prices by 20% until you found a way to make up the lost business? Is their anyone who believes the business should not try to maintain or make up the lost 20% of sales and profit?

The Government is changing the fuel mileage standards for automobiles. The new target is coincidentally 20% higher than the old standard for automobile fleet MPG ratings. This means in effect, you can expect your car will get 20% more miles to the gallon of gas.

This also means the Feds have mandated a loss in sales to the oil companies of 20%. Now think about your earlier answer. Should we expect the oil producers to take a 20% hit on sales and profit? Do you think this will make the price of a gallon of gas lower? There will be more gas, I guess, so the jump at the pump will be offset somewhat by supply and demand.

Once again we have an example of the Government sticking their nose into private business. If I choose to drive a car that gets 5 mpg, as long as I am paying for the fuel, why is it the Government's business? If I want to invest my private capital into producing the next Hummer, shouldn't the market decide the gas guzzler's fate? Is it really the role of Government to tell us what to drive, what to eat, how to live?


Mockingbird said...

Yes, it is the market that will decide, as we vote with our dollars.
In America, it isn't up to the government to decide a person's decisions.
If left wing types think the tea party is horrible for advocating commerce over collectivism, wait til we free marketeers kick it up to another level.

Cappy said...

Too complicated for the dumbfuck hippies running the show to understand. Write slower for them.

Anonymous said...

Talking about Hummers. They were selling and were still in demand when they were intentionally put in the grave. It was a hoax that a foreign entity was going to buy it and continue mfg the wonderful beasts that were of a piece of art combined with quality manufacturing. And guess what? Americans are still demanding our big, beefy vehicles and choosing to buy used road warriors over the new tinny, whiny, little things. The high gas prices are balanced, when driving one of our big metal lovers, with lower insurance and replacement parts costs.

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