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Old 04-27-2006, 10:24 AM
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Eric5273 Eric5273 is offline
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Quote:
Originally Posted by JV
Some states actually have laws forbidding the sale of gas for less than their cost
There actually is a point to those laws. They protect smaller businesses.

Imagine this: Imagine you are the independent owner of a small gas station. Now imagine that the rest of the gas stations in your town are owned by Exxon-Mobil. Maybe your market share of the gas sold in this town is 10%. Exxon-Mobil decides that they want your market share. So their business analysts do the math and figure out that if they sell gas for less than cost, they will put you out of business within 6 months. They determine that the loss they will take over that 6 months can be made up during the following 2 years by gaining your 10% market share, and then after that it is all extra profit.

See where I'm going with this?
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