Market performance is a multidimensional concept. Long-run rates of return and the extent of technical progress are among the more important aspects of performance.

PRICES AND PRODUCTIVITY TRENDS—OIL

Crude oil and gasoline prices during the 1950-1973 period are presented in Table 4-1. In terms of crude oil, many prices in 1973 are somewhat above their 1950 level but when the effect of inflation is accounted for, crude oil prices in 1973 are less than their 1950 level. During this period crude oil prices advanced at a rate less than the rate of inflation. Gasoline prices display a similar pattern. Actual prices increased over the 1950-1973 period but their rate of increase was less than the rate of inflation; consequently gasoline prices, in real terms, were lower in 1973 than they were in 1950. Since 1973 however, the real price of both crude oil and gasoline has increased significantly.

Productivity levels, defined as output per man hour, in petroleum refining for the 1939-1971 span are presented in Table 4-2. During the 1960-71 period, productivity advanced at an average annual rate of 5.8 percent.

The behavior of prices over long periods of time, while of obvious interest to consumers, does not bear directly on the question of how competitive an industry. Effective competition implies that prices will equate with opportunity costs; thus it is the relationship of price to cost that is directly relevant to the question of competition. An industry could display declining prices while at the same time have a widening price-cost gap, which in the long run would be indicative of ineffective competition.

PROFITABILITY