How do you force a company/corporation/industry to lower its prices?

[Mr.IncrediblyBored]

People have suggested 'buy less', but absent price gouging, that can actually raise prices, as it increases the costs to the business, reducing economies of scale.

Unless there is some kind of price collusion, like with DRAM some years ago, lowered demand always causes prices to tank. How many commodity traders would lose their nut when futures tumble and they sell at a loss?

 

[poofyhairguy]

People cite Venezuela, but there's bad and good. Having his economy held hostage by foreign interests who sabotage him if he doesn't let them gouge and take away the country's wealth isn't exactly a good 'solution' either. When he put a top to that, American contractors sabotaged the systems, refusing to give passwords, a major six month economic shutdown of the economy was organized to try to pressure the government to give in. Those foreign interests weren't 'for the consumers'.

Oh no! The foreign companies wouldn't let Venezuela steal their capital, what assholes.

Heck, if the government tried to absorb all the things I owned without fair compensation I wouldn't cooperate either. You want my house? Have fun with the smoldering cinders I leave you then.

 

[Blackjack200]

People have suggested 'buy less', but absent price gouging, that can actually raise prices, as it increases the costs to the business, reducing economies of scale.

That might be true for some products and services, but petroleum prices seem to drop precipitously whenever there's a disruption to demand. Examples being a warm winter or a rainy labor day weekend.

 

[Markbnj]

they are doing that anyway

The windfall profits tax was enacted 34 years ago, and then repealed. So it's not a current motivation in any case. My comment was intended to highlight the nearly immediate effect of a tax like that.

 

[slag]

Heres an idea, but stop buying products from a company if they are too overpriced?

When the alternative is no alternative, that's not an alternative.

 

[Ns1]

incentives to increase competition

 

[soulcougher73]

Well what ive done in the past it kill the CEO and then threaten the board of directors and new CEO with death threats. Once they see im not messing around i usually get my way.

 

[slag]

People who say "stop buying X if its too expensive" are on the right path, but the argument doesn't work for needs, only wants.

For example, I like diet coke and its competitively priced with other soft drinks. If tomorrow Coke decides to raise their prices 50%, I have no problems switching over to something else. It's not a need and there are alternatives that don't involve any or little out of pocket expense. The true is not same about gas prices. If I think prices are too high and want to do something about it, I have to either quit my job or find a job within biking distance from home. Don't know what I'll do in the winter though. Electric cars are too expensive and don't have the distance I need for work and leisure nor the charging infrastructure here in the midwest.

Basically, there is no alternative to gas and gasoline derivatives such as propane, diesel, etc that has a low cost to entry and is viable for my needs. People who say "stop buying X" have an overly simplistic view of things and haven't really thought it out for wants vs needs.

On the plus side, I won't be using the jetski or boat or lawnmower anymore so I can sell those items off.

 

[CPA]

Does nothing to lower prices. Only enriches the government, and Republicans would never allow it to be reinstated.

Next idea.

Not just Republicans, but Democrats too. Have you heard jacksquat about the Windfall Tax since Obama took office the first time? No, Not One Time!

Full disclosure, a windfall tax is the stupidest thing ever uttered.

 

[Mr.IncrediblyBored]

When the alternative is no alternative, that's not an alternative.

In the U.S., people have been opting to drive less or none at all. Average miles driven has been plummeting for years.

http://www.advisorperspectives.com/dshort/updates/DOT-Miles-Driven.php

People who say "stop buying X if its too expensive" are on the right path, but the argument doesn't work for needs, only wants.

The shift isn't sudden. You might not be able to quit buying gasoline cold turkey, but your kids are going to see the high prices and potentially pick a home closer to their job, likely closer to urban areas where there is a higher concentration of jobs. This is happening all over the country already.

 

[CPA]

People cite Venezuela, but there's bad and good. Having his economy held hostage by foreign interests who sabotage him if he doesn't let them gouge and take away the country's wealth isn't exactly a good 'solution' either. When he put a top to that, American contractors sabotaged the systems, refusing to give passwords, a major six month economic shutdown of the economy was organized to try to pressure the government to give in. Those foreign interests weren't 'for the consumers'.

So, what you're saying is that companies should be forced to provide a product regardless of the governmental regulation placed on it.

 

[poofyhairguy]

In the U.S., people have been opting to drive less or none at all. Average miles driven has been plummeting for years.

As average car efficiency has increased.

 

[Blackjack200]

As average car efficiency has increased.

And domestic oil reserves have increased. Pretty incredible what has happened in the last 10 years WRT "energy independance". We were freaking out about "reliance on foreign oil" (remember that?) and then just sort of stumbled in our present situation where we have all the oil we need and are trying to export natural gas.

 

[Craig234]

Unless there is some kind of price collusion, like with DRAM some years ago, lowered demand always causes prices to tank. How many commodity traders would lose their nut when futures tumble and they sell at a loss?

I'll clarify. There are tradeoffs. In the longer term, less demand tends to increase the prices of goods that are produced rather than fixed in quantity.

If you are making 10,000 of something, you can usually make each one for less cost than if you are making 100. That's economies of scale.

But let's say you have every copy of an album by Frank Sinatra that can't be reproduced. The price goes up with demand. If it comes out tomorrow there are more details about Sinatra's mob connections and demand drops, and fewer people want those items, the price is likely to drop.

Given the complicated issues with gasoline production and a global market, it's probably best to put the supply and demand and economies of scale issues to the side, and instead to look at the difficulty Americans have ever organizing a boycott like a major boycott of gasoline. How likely is that?

Who knows what would happen if there was a boycott. Maybe the producers would strike back with a cut in production and actually raise the price in retaliation. Who knows.

 

[Craig234]

Oh no! The foreign companies wouldn't let Venezuela steal their capital, what assholes.

Heck, if the government tried to absorb all the things I owned without fair compensation I wouldn't cooperate either. You want my house? Have fun with the smoldering cinders I leave you then.

Ah, the voice of ignorance has a post.

I just reviewed a list by Reuters of the industries nationalized - and the compensation. On every item they had analysts' opinions, the compensation was fair.

On oil, France and Norway were paid $1 billion. BP and Chevron remained as minority partners. Exxon demanded $12 compensation; Venezuela offered $1 billion.

They went to arbitration in the International Chamber of Commerce, which awarded Exxon $900 million.

Ya, you portrayed the issue very accurately.

 

[theeedude]

Competition. Strict anti-trust enforcement.

 

[MongGrel]

Just curious.

There is a particular member here who advocates forcing a particular industry to reduce its prices but absolutely will not address how to accomplish it. (Speaking of the oil industry, btw, and I bet you know the thread.)


Here's the quote from the member:




Now, I'm no big time economist, but I can see only a very few ways to "force" a company/corp/industry to lower the prices it sets for its product. The govt. can nationalize the industry, a la Venezuela's model, or put in price caps/controls, neither of which work too well.

Any other ideas?

You don't, they are people now that own a shitload of lawyers and lobbyists.

At least in the US, people like Venezula etc just told the CEO's to go bite it, took control of them and Nationalized them I guess.

Frig Putin did that years ago I guess, he just keeps changing jobs from decade to decade, and doing things like that.

Dubya must have been pissed awhile he couldn't pull the same thing off here, but I guess he's well set up and cutting brush when he want's to.

 

[uclaLabrat]

Competition. Strict anti-trust enforcement.

This, a la porter's 5 forces

 

[GrumpyMan]

Well if I've learned anything from Blacklist, you should cut off some fingers, kidnap a spouse, hack into to their bank and transfer their money, knock off a politician or two, etc. etc.....oh yeah and have a lovely daughter that doesn't know you are her dad of course.

 

[frostedflakes]

When the alternative is no alternative, that's not an alternative.

Legs
Bikes
Ethanol
Biodiesel
CNG
Electric
etc.

Plenty of alternatives. Now, if people continue to drive vehicles designed to burn petroleum based products because they continue to be most convenient and affordable option, well... clearly the oil companies aren't price gouging and screwing over the consumer as bad as people like to complain about.

 

[dmcowen674]

How do you force a company/corporation/industry to lower its prices?

No doubt the OP was talking about me.

My posting the miscreant deeds of his Oil buddies angers him daily.

Doubt that he has learned anything.

 

[Blackjack200]

Who knows what would happen if there was a boycott. Maybe the producers would strike back with a cut in production and actually raise the price in retaliation. Who knows.

That's exactly what OPEC tries to do, except not in retaliation. They've lost a lot of their price setting power as additional discoverable reserves of both oil and gas have been discovered.

Well if I've learned anything from Blacklist,

Spoiler

you should cut off some fingers, kidnap a spouse, hack into to their bank and transfer their money, knock off a politician or two, etc. etc.....oh yeah and have a lovely daughter that doesn't know you are her dad of course.

Ugh. SPOILER TAGS 😡

 

[GrumpyMan]

It's been broadcast already, not spoiler tag worthy. If someone doesn't watch the show, not my problem.

 

[Craig234]

It's been broadcast already, not spoiler tag worthy. If someone doesn't watch the show, not my problem.

I'm for spoiler tags even if it's been broadcast - not everyone watches shows immediately, and don't need them ruined - but didn't really much spoiler there. The one thing that would be a real spoiler in it, the show has said the opposite of what you claim, so it seems more like guessing, not a spoiler.

But for example, I haven't seen Homeland yet, and don't need to see the spoilers from even the first season - spoiler tags are good.

 

[Pulsar]

Just curious.

There is a particular member here who advocates forcing a particular industry to reduce its prices but absolutely will not address how to accomplish it. (Speaking of the oil industry, btw, and I bet you know the thread.)


Here's the quote from the member:




Now, I'm no big time economist, but I can see only a very few ways to "force" a company/corp/industry to lower the prices it sets for its product. The govt. can nationalize the industry, a la Venezuela's model, or put in price caps/controls, neither of which work too well.

Any other ideas?

Price caps work very well. Look at the power industry. It's the one industry where regulation has done a fairly good job of keeping prices under control.