Lesismore46's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/50734/comments http://seekingalpha.com/article/174792-what-natural-gas-prices-say-about-the-domestic-economy?source=feed#comment-773705 773705 marginal cost should equal marginal price, but quantity demanded must equal quantity supplied for there to be equilibrium. So as QD drops or fails to increase, QS must also drop, not increase! Prices have already plummeted because of low QD. Yet the producers have failed to reduce QS, so we have a surplus. The only way to relieve a surplus is for prices to remain low, QS to decrease, and as the economy recovers, QD will increase. The producers are definitely ignoring the economics of the market by continuing the surplus. Prices will not recover until the surplus is reduced. This is ECON 103

On Nov 23 11:35 AM ricardoRI wrote:

> For those of you who missed Econ 101 in college, here is a little
> refresher. Natural gas is a commodity, so there is no way to increase
> your margin over the market price. Natural gas extraction and delivery
> is highly capital intensive, which means high fixed costs, such as
> interest and equipment maintenance. Since the gas market is relatively
> free and competitive, there is no single monopolistic producer than
> can set prices.
>
> Any CEO who did not sleep through Econ 101 knows to maximize profit
> (e.g., his/her bonus and stock price) knows he has to generally produce
> as much as he can so long as his marginal cost is below his marginal
> selling price.
>
> There is no benefit for a CEO to reduce his company's production,
> although he would love it if all the other CEOs reduce production.
> When all the storage is full and production exceeds current demand,
> then he will reduce production because prices will crater.
>
> His only other option is to try to control prices with a cartel or
> oligopoly, which is illegal.
>
> This has nothing to do with irrational CEOs or investors. This is
> basic economics.]]> Mon, 23 Nov 2009 13:54:25 -0500 marginal cost should equal marginal price, but quantity demanded must equal quantity supplied for there to be equilibrium. So as QD drops or fails to increase, QS must also drop, not increase! Prices have already plummeted because of low QD. Yet the producers have failed to reduce QS, so we have a surplus. The only way to relieve a surplus is for prices to remain low, QS to decrease, and as the economy recovers, QD will increase. The producers are definitely ignoring the economics of the market by continuing the surplus. Prices will not recover until the surplus is reduced. This is ECON 103

On Nov 23 11:35 AM ricardoRI wrote:

> For those of you who missed Econ 101 in college, here is a little
> refresher. Natural gas is a commodity, so there is no way to increase
> your margin over the market price. Natural gas extraction and delivery
> is highly capital intensive, which means high fixed costs, such as
> interest and equipment maintenance. Since the gas market is relatively
> free and competitive, there is no single monopolistic producer than
> can set prices.
>
> Any CEO who did not sleep through Econ 101 knows to maximize profit
> (e.g., his/her bonus and stock price) knows he has to generally produce
> as much as he can so long as his marginal cost is below his marginal
> selling price.
>
> There is no benefit for a CEO to reduce his company's production,
> although he would love it if all the other CEOs reduce production.
> When all the storage is full and production exceeds current demand,
> then he will reduce production because prices will crater.
>
> His only other option is to try to control prices with a cartel or
> oligopoly, which is illegal.
>
> This has nothing to do with irrational CEOs or investors. This is
> basic economics.]]> http://seekingalpha.com/article/107981-oil-price-decline-bad-news-for-future-supplies?source=feed#comment-315581 315581 Wed, 26 Nov 2008 12:01:25 -0500 http://seekingalpha.com/article/92897-is-a-coffee-price-breakout-imminent?source=feed#comment-251781 251781
Shelf Life Ground coffee - 2 years unopened, 2 weeks opened (in refrigerator)]]> Thu, 11 Sep 2008 13:14:39 -0400
Shelf Life Ground coffee - 2 years unopened, 2 weeks opened (in refrigerator)]]> http://seekingalpha.com/article/79303-citadel-infuses-e-trade-with-strong-experienced-management?source=feed#comment-176163 176163 Thu, 29 May 2008 14:03:07 -0400 http://seekingalpha.com/article/78478-want-lower-gas-prices-ok-let-s-increase-supply?source=feed#comment-171953 171953 Thu, 22 May 2008 13:46:47 -0400