profiteer = 'make any kind of profit'

Dan Goncharoff thegonch at GMAIL.COM
Fri Oct 14 16:15:30 UTC 2011


Here's a simple example -- in period 1, fuel costs go up for a
utility, which reduces profits. They are allowed to raise their rates,
perhaps even more than the increase in costs (if they are regulated to
earn a margin on total costs), but the rate rise doesn't take place
until period 2.

In period 2, with the rate rise, the net profit goes back to normal or
above, which may be much greater than the reduced profits of period 1.

If fuel costs go back down, this can create a period with extreme
profits, before rates are lowered.

On Fri, Oct 14, 2011 at 11:29 AM, Joel S. Berson <Berson at> wrote:
> I don't quite understand how an increase in costs of materials, when
> passed on, must result in an increase in profits.  (An increase in
> gross income, OK.)  So one could assert that they were profiteering
> by adding something on beyond their increase in costs.
> Joel

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