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Nice Logic – It May Work!!

September 1, 2008

AUTHOR:RAJAT

A man eats two eggs each morning for breakfast.  When he goes to the Kirana store he pays Rs. 12 a dozen.  Since a dozen eggs won’t last a week he normally buys two dozens at a time. One day while buying eggs he notices that the price has risen to Rs. 16. The next time he buys groceries, eggs are Rs. 22 a dozen.

When asked to explain the price of eggs the store owner says, “The price has gone up and I have to raise my price accordingly”. This store buys 100 dozen eggs a day. He checked around for a better price and all the distributors have raised their prices. The distributors have begun to buy from the huge egg farms.  The small egg farms have been driven out of business.  The huge egg farms sell 100,000 dozen eggs a day to distributors.  With no competition, they can set the price as they see fit. The distributors then have to raise their prices to the grocery stores. And on and on and on.

As the man kept buying eggs the price kept going up. He saw the big egg trucks delivering 100 dozen eggs each day. Nothing changed there.   He checked out the huge egg farms and found they were selling 100,000 dozen eggs to the distributors daily. Nothing had changed but the price of eggs.

Then week before Diwali the price of eggs shot up to Rs. 40 a  dozen. Again  he asked the grocery owner why and was told, “Cakes and baking for the holiday”.  The huge egg farmers know there will be a lot of baking going on and more eggs will be used. Hence, the price of eggs goes up. Expect the same thing at Christmas and other times when family cooking, baking, etc. happen.

This pattern continues until the price of eggs is Rs. 60 a dozen. The man says, ” There must be something we can do about the price of eggs”.

He starts talking to all the people in his town and they decide to stop buying eggs. This didn’t work because everyone needed eggs.

Finally, the man suggested only buying what you need.  He ate 2 eggs a day. On the way home from work he would stop at the grocery and buy two eggs. Everyone in town started buying 2 or 3 eggs a day.

The grocery store owner began complaining that he had too many eggs in his cooler.  He told the distributor that he didn’t need any eggs.
Maybe wouldn’t need any all week.

The distributor had eggs piling up at his warehouse.  He told the huge egg farms that he didn’t have any room for eggs would not need any for at least two weeks.

At the egg farm, the chickens just kept on laying eggs.   To relieve the pressure, the huge egg farm told the distributor that they could buy the eggs at a lower price.

The distributor said, ” I don’t have the room for  the %$&^*&% eggs even if they were free”.   The distributor told the grocery store owner that he would lower the price of the eggs if the store would start buying again.

The grocery store owner said, “I don’t have room for more eggs. The customers  are only buying 2 or 3 eggs at a time.  Now if you were to drop the price of eggs back down to the original price, the customers would start buying by the dozen again”.

The distributors sent that proposal to the huge egg farmers but the egg farmers liked the price they were getting for their eggs but, those chickens just kept on laying. Finally, the egg farmers lowered the price of their eggs.  But only a few paisa.

The customers still bought 2 or 3 eggs at a time. They said, “when the price of  eggs gets down to where it was before, we will start buying by the dozen.”
Slowly the price of eggs started dropping.  The distributors had to slash their prices to make room for the eggs coming from the egg farmers.

The egg farmers cut their prices because the distributors wouldn’t buy at a higher price than they were selling eggs for. Anyway, they had full warehouses and wouldn’t need eggs for quite a while.

And those chickens kept on laying.

Eventually, the egg farmers cut their prices because they were throwing away eggs they couldn’t sell. The distributors started buying again because the eggs were priced to where the  stores could afford to sell them at the lower price.

And the customers starting buying by the dozen again.

Now, transpose this analogy to the gasoline industry.

What if everyone only bought Rs 200.00 worth of Petrol each time they pulled to the pump?  The dealer’s tanks would stay semi full all the time.  The dealers wouldn’t have room for the gas coming from the huge tanks.  The tank farms wouldn’t  have room for the petrol coming from the refining plants. And the refining plants wouldn’t have room for the oil being off loaded from the huge tankers  coming from the oil fiends.

Just Rs 200.00 each time you buy gas. Don’t fill up the tank of your car. You may have to stop for gas twice a week, but the price should come down.

Think about it. Also, don’t buy anything else at the fuel station; don’t give them any more of your hard earned money than what you spend on gas, until the prices come down…”

…just think of this concept for a while. ………………please pass this concept around….reaching out to the masses …the world …..

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20 Comments leave one →
  1. September 1, 2008 11:14 am

    Interesting… very interesting n thot provoking!!!!

    lets spread the word and see what we can do!! this just mite work!!
    heck, it works on em eggs, shd work on petrol 😉

  2. September 1, 2008 11:20 am

    Hi,

    I am Richa from SiliconIndia, I trust my email finds you in good health and high spirits. I am also an avid blogger and thought it’s a good time to initiate an interaction by updating you on some of the recent happenings at SiliconIndia.

    • We are now a strong community of 1 Million professionals
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    We have leaders like Narayan Murthy, Azim Premji to fresh graduates who share their opinion & thoughts to contribute their knowledge and advice through blogging.

    We would love to see you, embark on blogging here and sharing your perspectives to the rapidly growing SiliconIndia community and appreciate your community initiative here.

    Please mail me back at richa@siliconindia.com with your suggestions and feedback.

    Richa Sharma
    Blog Editor – SiliconIndia

  3. September 1, 2008 2:31 pm

    hey… i got this email too. nice logic tho. I thot of putting it up but u did it first. neway… good.
    It should work for petrol too. we all have to use it properly and logically.

  4. September 1, 2008 6:10 pm

    i don’t see any logic in this at all….I mean Rs.200 worth of petrol?We will spend more time in the petrol bunk than anywhere else…and besides in Chennai there was diesel shortage and people were allowed to get diesel only for Rs.500…now that wasn’t enough at all and people kept going to different bunks,to fill up more…

    you eat only 2 eggs day alight…but you consume more petrol,than for Rs.200…

  5. creativerajat permalink
    September 1, 2008 10:28 pm

    @ Aaarati,
    Thanks lets try this out in Petrol 🙂
    @ Vishesh,
    I agree to your comments partially that our consumption is more than Rs 200 , but if we think, lot of time we go to small distances using petrol/diesel vehicles whereas it was better if we go walking,cycling or there is a better public transport like train,bus etc available. If we all together make those small judicious choices it will definitely help us pulling some demand of fuel. Then only the egg example can work out.
    @Hasit,@Logic,
    Thanks for your comments.

  6. kaddhu permalink
    September 2, 2008 12:36 am

    hmm…interesting observations, but eggs and petrol are very different categories of goods….
    We can control egg consumption to a much larger extent than petrol. Even if we stopped buying petrol altogether, the government would still have to buy it for public transport…
    I agree that lesser consumption by all, would lower the price, but the amount of petrol any vehicle needs is fixed. There’s nothing we can do to change that….so, such a measure won’t be as effective with petrol as it is with eggs…
    Like, my car gives 20kn per litre. The petrol bunk is 4km away, and the price of petrol is over 50 rs per litre…
    Using public transport and carpooling are the only ways to reduce petrol prices…but even that is very marginal and gradual…the demand for petrol, as such, will still be quite high, since it’s a necessity….
    btw, thanx! u just defined a consumer driven market for me….forgot wat it’s called,though…some kind of oligopoly, i guess…but thanx neway!! 🙂 And u gave an awesome illustration of the law of demand….Thanx!!! 😀
    If i dint make sense, don’t worry…they’re economic concepts…in my text book… 😛

  7. September 2, 2008 3:51 am

    Interesting but one question…. don’t we get more for our money if we fill up our tanks when the tank is half full? I read somewhere that the vapors take up space and make less gas per gallon…

  8. September 2, 2008 11:09 am

    hmmmmmmm….

  9. September 2, 2008 5:28 pm

    well rajat ,right..now i ask you how many people are going to use vehicles to go for short distances…we live in cities,where things are far apart…no one is going to go to the next street in a car…by the time we move the vehicle,we could have walked there….i agree with kaddu…

    it is not about making the egg concept work,i am questioning the base of the whole concept!

  10. September 2, 2008 6:10 pm

    Hmm I think people can live without eating eggs but not without petrol!! 😀 so this logic aint gonna work!!

  11. September 2, 2008 6:26 pm

    Logic? Or No logic? This will certainly work for eggs – maybe I don’t even know that because I’m not an egg-eater!

    Well, I’ve just got one thing to say:

    If you find the egg prices going up too much, you can fill your stomach with something else (probably tomatoes; who cares!) but, if the petrol prices go up, try filling your car up with water! 😛

  12. September 2, 2008 8:09 pm

    @Manoj,
    I agree, we can do without eggs, but i do hope someday there will cars running on water and other items. thats what we need to do research on. thats the need of the hour. lets all just hope that our super brainy scientists come up with such superb inventions as fast as possible.
    @Vishesh,
    u need to understand dude. any system tht’s applicable for a few things has to be applicable for the rest. it might take some time but we need to wait and do our part. We cant just go on depleting our already-on-the-verge-of-depletion resources

  13. September 2, 2008 8:26 pm

    hmm…well you know what fresh water is a rare commodity too Hasit 😛 you can’t use the sea water for fuel you know…and ya things which apply for a few things apply,alright if they belong to the same principle…well water is a universal solvent…try oil with it na..

  14. September 2, 2008 8:32 pm

    This whole discussion is ridiculous.
    Check out this link
    http://skeptoid.com/episodes/4087

  15. September 2, 2008 8:39 pm

    Potential hazards of using water or rather the gas derived from it

    1. Chance of exploding oxyhydrogen gases if mis-used.
    2. Blowing fuses.
    3. Water damage to the exhaust over time.
    4. Water in the engine – if you are really really careless.

  16. creativerajat permalink
    September 3, 2008 12:27 pm

    @ Kaddu,
    Thanks for posting and bringing up the concept of car-pooling, I know in Bangalore few friends had started this and now they have started a car-pooling company 🙂
    @ Beth,
    Good point, that is true from an engine point, the point is not filling your tank half rather its a mindset issue of an individual to switch to alternative cheaper modes whereever possible and reduce the use of cars.
    @Vishesh,
    I did not mean using cars to go short distance, rather I meant to choose the option of car only when you think there is a real need for it and there are no other better public transport mechanism to help you out.
    @Reema,
    I agree its tough to make this idea work , that was one of the idea of posting this here , only if people like us pass the message and educate our friends on better fuel consumption mechanism and switching to alternatives whereever possible it might work.
    @Manoj,
    Good one 🙂
    @Hasit,Vishesh,Reema,
    Thanks for starting the creative discussion of making car run in water 🙂 Infact, I listened to this news in Reuters last week that scientists has discovered the bio-fuel plant which gives better efficiency than petrol, only challenge is the extraction process which makes it costlier..But I guess the days will not be far when everyone will plant the fuel yielding plant in own garden and extracting own fuel and driving their own car..lets hope… 🙂

  17. September 3, 2008 12:33 pm

    @vishesh,
    water is a universal solvent, agreed. But oil doesnt desolve in it is because of the lower density of oil compared to water. its not the fault of the water. if you go to see that way, all theories have been proven wrong. thats what science is all about. there have been around 6-7 atomic models, even newton’s laws of motion has flaws and extensions are now added.

    @Reema,
    one person (or a group of people) saying that cars cannot run on water doesnt mean we stop thinking in that direction. Come on now. We are in the 21st century, science is so advanced and everything is developing so fast. we cant lose hope. if that would have been the case, then we would be still praising the sun and thinking that the earth is flat and the sun revolves around the earth.

  18. September 3, 2008 1:49 pm

    Finally I see a worthwhile post on youth unite-where a young mind is giving a simplistic idea to complex problems…..
    Very well written and analyzed.
    Kudoz to you….

  19. September 5, 2008 2:51 pm

    Very interesting, inspiring and thought provoking 🙂

  20. Aiz permalink
    September 5, 2008 7:45 pm

    Nice initiative people..

    All the Best.

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