California 's Gas Prices Overpriced

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California’s Gas Prices Overpriced California since the gold rush has been known as the “Golden State” where it’s flooded with multicultural richness from the beaches to the mountains. California today is the most densely populated state with 38.8 million residents and is still rising, however, not only is the population ever increasing so are gas prices. Allysia Finley an editorial writer from The Wall Street Journal states, “The national average is $2.76 a gallon, while the Golden State drivers pay $3.88. Eco-virtue is expensive” (Finley 1). Gas prices in California has left an effect of overpriced due to many contributing factors: regulation over the environment, overconsumption, and how rational people think at the margin.
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However, mostly these regulations have affect only those small refineries drastically to the point of a shut down and let only the big and powerful industrial companies’ take over and collect more profit. Jennifer L. Brown author of “The Market Effects of Going Green” states, “Additionally, trends in industry concentrations during the time period reformulated gasoline regulation compliance appear to have favored large refiners as small refiner market share decreased and industry concentration increased simultaneously from 1997 to 1999” (Brown 126). Meaning that regulations in California can be visible from the 90’s and have slowly increased, yet unnoticed to the public until now. While these large corporations have slowly eliminated its small rivals and maintain more of the power of the market in gasoline. Which later can have an effect of market failure.
Multiple solutions to California’s problem have a rise in order to prevent a long-run effect or a market failure. For instance, Tom Steyer a billionaire environmentalist has proposed an oil-extraction tax. However, adding another tax can lead into two directions. First, if it becomes a corrective tax to corporations it can correct their actions, and take account of the social cost. Which leads to low prices for consumers, and at the same time protect the environment because the seller will have the incentive to reduce low pollution. Or it can create

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