5 thoughts on “It’s the margin, stupid!”

  1. Posted 01/08/2017 at 11:53 | Permalink

    Isn’t it a ban on the sale of new petrol/diesel cars? Quite a different thing.

  2. Posted 02/08/2017 at 11:06 | Permalink


    I can’t see how your clarification on the specifics of the policy undermine the point of this article. For argument’s sake, let’s stipulate that the marginal cost of replacing a non petrol or diesel vehicle in a remote area or in some specific use in the future far exceeds the marginal benefit derived from emissions reduction. This policy would impose costs far higher than the benefits of using a less climate-changing friendly vehicle in those applications. Not quite the different case you imagine.

  3. Posted 07/08/2017 at 00:43 | Permalink

    What you stated about the electric cars is valid. However, with the advent of electric vehicles there will be a demand for electricity. Since there is a variety of utility rates throughout the U.S., for example electricity rates are $25 for 1,000 miles and they are $107 in Hawaii for the same amount of miles, the marginal cost would be similar to that of gas. Therefore, there is a profit in electric cars. Additionally, gasoline powered cars cost about 90 cents per gallon at the rate of 30 mpg and electric cars would cost around 15 cents per kilowatt hour (which covers over 30 miles). The 15 cents would vary depending on the utility costs in each state, but their marginal costs are far lower than gasoline powered cars and they have a higher marginal revenue. Therefore, UK is justified in passing legislation that prohibits gasoline powered cars after the year 2040.

  4. Posted 07/08/2017 at 00:55 | Permalink

    Your point in electric cars is valid. However, with the advent of new technology the demand for electricity will also increase. According to the article produced by Carroll Lachnit, “The True Cost of Powering an Electric Car,” an electricity rates would vary across the states. In Washington the cost would be $25 for 1,000 miles and in Hawaii it would be $107 for the same amount of miles. Therefore, it would be similar to the gasoline industry that runs today. Additionally, the marginal cost of an electric car is lower than that of a gas powered car. The article “Advantages Disadvantages of Electric Cars,” explains that gasoline costs 90 cents per gallon used at the rate of 3o miles and electric cars would cost 3 cents a mile if electricity costs 15 cents per kilowatt hour. This results in a 60 cent profit in MC=MB. Therefore the UK is justified in passing legislation that prohibits gas powered cars after the year 2040.

  5. Posted 25/08/2017 at 17:02 | Permalink

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