Broken nozzles When world LPG prices are rising dedicated stations are not willing to supply -for each unit they supply, they could be losing money That the revenue cannot even cover the variable cost the firms' best decision is to shut down the stations Can the stations be shut down? lease and they are under a service contract to supply tpg and No. Because the dedicated stations are given a subsidy in What could be better if the nozzles were broken8 Broken nozzles ◼ When world LPG prices are rising, dedicated stations are not willing to supply – for each unit they supply, they could be losing money. That is, the revenue cannot even cover the variable cost. The firms’ best decision is to shut down the stations. ◼ Can the stations be shut down? ◼ No. Because the dedicated stations are given a subsidy in land lease, and they are under a service contract to supply LPG. ◼ What could be better if the nozzles were broken?