UNFAIR PRICING PRICE COLLUSION - Canadian retail gas prices - male / female clothing, services (haircuts)

updated 2007 Sept 17

.
.

INTRODUCTION

In many "intro to business" and "intro to marketing" courses we talk about the differences between a Monopoly, Oligopoly, Monopolistic competition and Pure competition. When you have Pure Competition, prices may vary widely since many "players" are in the market and they all have different costs and different profit objectives. When you have  a Monopoly, you typically have one set high price cause there is no competition to force the big seller to lower prices. When you have an Oligopoly you can also have a situation of high prices because there are no small companies forcing the big companies to lower prices. Typically this situation arises when it is very expensive to "get into" the business sector - for example to be in the banking business you need millions and millions of dollars and thousands of employees. Of the 4 types of competition (  witiger.com/marketing/typesofcompetition.htm  ) price collusion most often happens when the competitive situation is that of an Oligopoly.

.

Dan McTeague, a hard working MP from the very multi-cultural riding of Pickering-Ajax-Uxbridge, (and friend for many years of Prof. Tim Richardson) served as the Parliamentary Secretary to the Minister of Foreign Affairs with special emphasis on Canadians Abroad. Dan is also best known as the politician who is the champion of the people when it comes to fighting the large gas companies over price collusion on gas prices. mcteague.ca/print/print_022407_gasinquiry.htm  Dan says (May 2007) "You have a classic oligopoly and it's important for Ottawa to get its collective head out of the sand because it is responsible for our flawed Competition Act ...most Canadians instinctively know, that oil companies are reaping profits on the backs of consumers who have no choice but to pay the asking price."

asx

read the CBC story on gas prices  cbc.ca/consumer/story/2007/05/10/gas-report.html  "Canadians are being gouged at the gas pumps, paying in excess of 15 cents a litre more for gasoline than justified by costs and historic petroleum industry profit margins" The CBC says "The Canadian Centre for Policy Alternatives says it examined gasoline prices ... there has always been an "unexplained differential" between what consumers pay at the pump and what they would be paying if the industry tied prices to costs and traditional profit margins."

x

Price unfairness Men's Haircuts vs. Women's haircuts There are a lot of places where you can go to on the Web and find Men's Haircuts listed much cheaper than Women's Haircuts.  Is this fair? Some salons deal with this issue a lot and they have notes on their website explaining that women are "more fussy" about their hair and that women's style take longer to do, on average, therefore the price differential.

bb

Price unfairness: Event Parking All year long "Joe's Parking Lot" charges $12.00 a day for parking at their crappy dirty lot - then when Caribana hits town - that weekend they charge $20.00 So you keep circling the block trying to find a cheaper spot and everybody else changed the prices too.

 
 

In June 2005 Prof. Richardson wrote the "Canadianized" version of a chapter on Ethics for the an International Business textbook published by McGraw-Hill Ryerson.
Some of the material in this unit comes from the writing Richardson did for that Ethics chapter and is © McGraw-Hill Ryerson 2006.
.

witiger.com	CONTACT I MAIN PAGE I NEWS GALLERY I E-BIZ SHORTCUTS I INT'L BIZ SHORTCUTS I MKTG&BUSINESS SHORTCUTS I TEACHING SCHEDULE
	.
	MISTAKES I TEXTS USED I IMAGES I RANK I DISCLAIMER I STUDENT CONTRIBUTORS I FORMER STUDENTS I
	.

.

Prof. W. Tim G. Richardson © www.witiger.com