Question

Complaints are often made that the gasoline industry colludes to maintain monopoly profits for the oil companies. Following Hurricane Katrina, supply of gasoline from refineries to gasoline providers was reduced. As a result, gasoline industry revenue increased. Critics contended that the higher revenue was clear evidence of collusion in the gasoline industry to raise prices and generate monopoly profits. Provide an economics critique of this argument.

Answer 1

In this case it is talking about complaints that are often made that the gasoline industry colludes to maintain Monopoly profits for the Oil Companies.
It is often Seen that all companies maintain a monopoly In this sector to decide the price and it is not a good thing to control the oil prices on the global level.
Many a time it is a situation in the international market where the oil and petroleum prices are decided by few Industries not on the basis of demand and supply forces in the international market.
But after a situation where hurricane Katrina the supply of gasoline from Refineries to gasoline providers was reduced and it is a clear example of reduction of resources in the economy.
As A result gasoline industry revenue increased.
It is because of the rising the price of gasoline not because of the international market prices standard but because of the other scenarios related to Collusion in the gasoline industry where few firms decided to managed and control the market by maintaining and creating a Monopoly type pricing strategies in the Global market so it is and economic critic on this argument that this is a true favour statement which represent us gasoline industry is dominating the Global market by providing a Collusion Monopoly pricing