Tuesday, September 23, 2008

How'd we get where we got this past weekend?

The Nashville Business Journal provides a fairly good analysis of how the Middle Tennessee area found itself in search of gas over this past weekend. What it didn't include was why stations did not hike their prices even more in order to manage their respective inventories. They kept prices relatively and, as expected, ran out. Price is a scarcity signal but for some reason Middle Tennessee area retailers were unwilling to hike prices beyond a certain point... and ran out.

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