00:01
Hello, so in this video we are going to look at a case for axon mobile.
00:08
So we know that exxonmobil is selling all its retail gas stations, and they are not a long amount big oil exiting the retail gas business.
00:17
The market where profits have gotten tougher as cool oil prices have risen.
00:23
And guest station owners say that they are struggling to turn profit because, well, gasoline price have risen sharply, they have been unable to raise prom prices fast enough to keep pace.
00:39
So given this case, we first is being asked, is x -mobile making the shutdown or as a decision in the retail gasoline market? so given that the narrative says that it sells out of its gas stations, then this is likely a long -term move.
01:01
Therefore, exxomobile is basically exiting the retail gasoline market.
01:08
The next question is that under what condition will this decision maximize assomobile's economic profit? so given this, let's first draw a graph for a typical gas station, right? so because, you know, gas station owners have really little power on setting the price of the market, we could basically assume that we are looking at a perfectly competitive market, right? so given this, every guest station owner is looking at a flat demand curve, and every unit that they sell equals to their marginal revenue.
01:53
And the gas station owner faced such a marginal cost.
02:01
And we know that it is very likely that the gas station is operating at a loss...