There are many reasons why “happy businesses” are able to earn excess returns, and we have already spent considerable time covering the ability of a strong brand to charge a premium price compared to the generic creators. The appeal of a happy business, however, extends beyond the core products themselves to the products closely related to a given business empire that are under-scrutinized.
Did you see the recent news out of Voorhees, New Jersey? Some gas station owner has decided to stop selling gas at the competitive price of $1.80 per gallon and instead is selling gas at the non-changing price of $3.98. The fine people of Voorhees have been right to dislike this business practice of selling a commodity at a clear premium relative to the peers, but the legal analysis of the townsfolk is a bit off.
People like Jeff Pettitt are threatening legal action against the gas … Read the rest of this article!