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Competition in the U.S. Energy Industry
hence a national market. Yet, the data in Table A-1 shows that,
for four makes of cars produced at single locations, only 30 states
are required to absorb 90 percent of shipments. Not surprisingly,
the 20 excluded states tended to be the less populous ones. Of
course, lacking adequate data to perform the LIFO test, we cannot
know if this market is national or regional.
(3)
Fragmentary data on beer shipments has been used to calculate
hypothetical market areas for beer. This data indicates that
Schlitz shipments originating in California were typically absorbed
on the West Coast while Milwaukee shipments of beer (say, Pabst)
were principally confined to the Midwest. Of course, data
sufficient to carry out step (4) was unavailable, but it is
unlikely that this market would be designated as national.
THE
GEOGRAPHIC MARKET AREAS FOR GAS, OIL, AND COAL
As noted
twice earlier, a market in which all producers are located at a
single point (with customers nationwide) is at least national in
scope. The producers of fossil fuel tend to be somewhat scattered,
but in the case of natural gas, production has a decidedly
centralized character. A majority of the states have some marketed
production of natural gas, but 90 percent of the marketed
production originates in only 5 states and the largest producing
states (Texas and Louisiana) account for more than two-thirds of
domestic, marketed production (Table A-2). Three adjacent states
(Oklahoma, New Mexico, and Kansas) produce about 18 percent and
hence this 5-state area roughly comprises the producing area
of the United States. If one takes account of offshore natural gas
in the Gulf Coast area, the effect is to reinforce this conclusion.
To be sure, 5 states are more than a single point on a map.
Nonetheless, the facts that these states are adjacent and are
characterized by interlocking pipelines suggests the reasonableness
of defining them as a single producing area.
Table A-1. Share of Domestic Salesof
Selected Makesof Automobiles Absorbed by Various States,
1970
| Number of
States |
Rambler |
Mercury |
Chrysler |
Cadillac |
| 10 |
61.08 |
61.61 |
58.87 |
65.27 |
| 15 |
73.25 |
72.63 |
71.07 |
74.26 |
| 20 |
81.55 |
81.10 |
80.41 |
81.30 |
| 30 |
92.39 |
92.01 |
91.57 |
89.05 |
| Source: Slocum Publishing
Co., Automotive News, 1970 Almanac Issue, pp. 36-7,
68. |