Well, when you operate on a "cost plus" arrangement, you can do that... They have corporate profit goals of let's say 10%. Quite modest, really. BUT, let's say you run a shop and your raw material triples in price - can you simply raise the price of your product to adjust so that you can still make 10% - He!! no. Not if you expect people to still buy it.
BUT, since we HAVE to have oil/gasoline, the price goes up and *poof*, profit PERCENTAGE stays the same.
HOWEVER - let's say we use $30/barrel oil and just for numbers sake, take 10%, that'd be saying that Exxon would make $3/barrel of oil used. Now if the price goes to $90/barrel, they won't be happy with making $3/barrel, so take 10% and badda-bing, they make $9/barrel. Go figure, still made 10%, just a lot more money.
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Today's Featured Article - Search For Spares - by Anthony West (UK). Following on from the aquisition of the old Fordson F, I was very much in need of spares. As a novice though I didn't appreciate the fact that there were so many Fordson tractors made, that all the other makes seem rare by comparison. As far as I was aware a fordson was a fordson and it was only through trial an
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