Comments on: Should companies impose fuel surcharges? http://andrewnorton.info/2008/07/should-companies-impose-fuel-surcharges/ Observations from Carlton's Lone Classical Liberal Mon, 01 Dec 2008 19:07:25 +0000 http://wordpress.org/?v=2.5.1 By: airline http://andrewnorton.info/2008/07/should-companies-impose-fuel-surcharges/#comment-54419 airline Sat, 25 Oct 2008 18:48:10 +0000 http://andrewnorton.info/?p=506#comment-54419 <strong>airline...</strong> airline... airline…

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]]> By: Rajat Sood http://andrewnorton.info/2008/07/should-companies-impose-fuel-surcharges/#comment-18270 Rajat Sood Wed, 09 Jul 2008 00:54:34 +0000 http://andrewnorton.info/?p=506#comment-18270 The international flights I am about to book were more expensive that the alternative "before taxes and charges" but cheaper overall. I think these levies are a sales tactic in two ways. First, consumers probably assume levies are similar amongst suppliers and hence are willing to go for the lowest pre-levy price. Yet, ironically, quoting levies separately is only informative if they differ between suppliers (cf GST). Second, they soften up consumers to pay higher prices because consumers are made to feel that prices are going up due to unavoidable cost increases rather than simply because demand exceeds supply. The community seems to think there is something deeply immoral about setting prices above costs (except for Australian minerals exports), even though this is an essential signalling mechanism. The international flights I am about to book were more expensive that the alternative “before taxes and charges” but cheaper overall. I think these levies are a sales tactic in two ways. First, consumers probably assume levies are similar amongst suppliers and hence are willing to go for the lowest pre-levy price. Yet, ironically, quoting levies separately is only informative if they differ between suppliers (cf GST). Second, they soften up consumers to pay higher prices because consumers are made to feel that prices are going up due to unavoidable cost increases rather than simply because demand exceeds supply. The community seems to think there is something deeply immoral about setting prices above costs (except for Australian minerals exports), even though this is an essential signalling mechanism.

]]> By: CoreEcon » Blog Archive » Fuel surcharges http://andrewnorton.info/2008/07/should-companies-impose-fuel-surcharges/#comment-18266 CoreEcon » Blog Archive » Fuel surcharges Tue, 08 Jul 2008 22:41:36 +0000 http://andrewnorton.info/?p=506#comment-18266 [...] Norton looks at the introduction of fuel surcharges. It started with airlines but that was all about stopping travel agents from [...] [...] Norton looks at the introduction of fuel surcharges. It started with airlines but that was all about stopping travel agents from [...]

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