The way I see it, Oil is a fixed percentage of the cost of goods. Think of a box of cereal. You have the cost of the cardboard box, the cost of the corn or wheat, the labor in the process of making the product. Let's say the cost of cardboard doubles. Now you have a percentage of your finished product that goes up. Let's say for the sake of argument that it is 50%. Everything else stays the same..... Manufacturers will simply pass on the cost of doing business to the end consumer. see the way the gap closed in the mid 1980s as an example.
would think that perhaps the cost of the box is higher than the product in the box, considering all the commodity ag subsidies?
so if the box mat'l goes up by that much, they'd have no choice but to either make the pkg smaller or thinner (use less cardboard) or immed jack up the price?
interesting thot process you got going, in any case.
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