price jumps ever notice that when there's bad news about oil supply, gas prices jump immediately - but when oil prices drop suddenly, gas prices fall slowly? ever wonder why? well fear not. timmer's here. imagine you run a gas station. and you need to bring in $10k/mo. and you make $0.10 per gallon of gas sold. you need to sell 100k gallons per month. you bought the gas you're selling this month last month. now you get the news that the next tanker truck of gas is going to be a $0.25/gallon more expensive. you could leave your price where it is now. and let it jump a lot next month. and immediately fall back to normal the month after. on the other hand, i could immediately raise my prices. you'd sell out all your gas at your low price. then you'd have to buy gas at a higher price. in the meantime, i can sell my gas at a nickel below your price. and this month i make $30k. then wer're pretty even steven again. you can counter my profit grab by also immediately raising your price too. in which case we both make $35k. and we can continue this game for quite some time until we settle on a stable solution. specifically, we collude and immediately raise our prices to some level. in this month we make extra. then maintain that price through the expensive period. in this month we make less, or even take a loss. afterwards we slowly lower prices to their normal levels. all the while we're making up profit we missed out on during the expensive period. at the end of the day... we each make pretty close to $10k/month on average.  ¶ 8:00 AM