8.5.05

PROTECTING COMPETITORS IS NOT PROTECTING COMPETITION. That is, unless you're worried about ruinous and destructive competition in gasoline prices. Katie at Constrained Vision picks up the story: apparently Maryland is one of several states (the People's Republic of Wisconsin is another; something along these lines happened there before I opened the Shops) with a minimum mark-up law preventing retailers from selling goods below their cost. (Repeat after me: bygones are forever bygones.) Thus, a gas station that buys gasoline from the jobber at $2.049 gallon cannot sell it for $1.999 a gallon, and if the average of recent jobber prices is $2.049, neither can a station that bought it at $1.999. In a nutshell, that's the classic tradeoff of antitrust: the lower prices are beneficial to consumers, but the lower prices are not in the public interest if they lead to greater concentration in retailing. Presumably the lawmakers fear an "everyday low prices" retailer growing complacent once all its rivals are gone for a long time. Mike at Knowledge Problem is also following the story; his post includes some links in case anybody wants to comment to the policy makers, or to the retailer that invoked the statute in preference to obtaining a good-faith price cut from his own supplier, a lawful competitive response.

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