Price signals: Natural gas vs oranges
- From: ta6bx@xxxxxxxxx
- Date: Mon, 10 Oct 2005 15:33:43 GMT
If there is damage to the orange groves due to a freeze, I see it
right away. Go to the supermarket, find that oranges are $5/lb and
decide to buy very little or not at all.
If there is damage to the natural gas production infrastructure. I
here vague warnings in the media (but ignore them) crank up my heat to
78F and then almost faint when I get my bill. The *next* month I cut
my thermostat back to 65F; when I get that bill I find that such
severe reduction in use was unneeded as the price per therm has
declined by 50% due to the bringing of production back on line and the
reduction in quantity demanded by all those who had heart attacks
after getting the previous bill.
Seems like the price signals for items such as natural gas,
electricity, etc are out of sync because one really does not know the
price until after the item has been used.
How does this affect the establishment of a market clearing price?
.
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