Generally we are affected by changes in our environment in many different ways. People reactions to those almost any change will vary. With the increased technology we have become accustom to products which provide us with convince, and often feel they are necessary for us to maintain existence. Sudden changes in supply and demand and pricing could lead us to analyze our need for a particular product or service, and consider using alternative methods. The alarming increase in gas prices at the pump is a challenge that is prevalent in most households today.
$45 Bundle: 3 Expertly Crafted Essays!
Expert Editing Included
There is a definite need or demand for gas; consumers tend to rely heavily on personal and public transportation which create a need for gasoline. This need generate a demand for that particular product. People want a lot of things; they demand less than they want, because they are not always able to afford what they want, demand means a willingness and ability to pay. (Colander D.C. (2004). No matter how high the gas prices have go the demand for gasoline the demand fluctuate very little because people adjust their behaviors, but ultimately we still need gasoline.
The demand for gasoline has risen due to the number of SUV's and larger vehicles requiring more gas. Commuters that commute a long distance to work also contribute to the demand for gasoline. Personal travel that has increased due to reasonably price tickets offer by the airlines. Higher price at the pump generally decrease the demand for a particular product. When the price rises and the demand decrease, usually the supply then increases. These are all factor that cant constitute a change in both supply and demand.
Recently you can notice a record number of raise in the gas prices nationally, while crude oil prices are and strong petroleum demand. Prices at the pump could continue to rise as people take summer vacation and refinery switch to producing heating oil for the winter. Summer time normally means increased travel personal travel and business travel. Which stimulated a increased in the demand for gasoline and increase in prices. U.S gasoline demand has increased in the last four weeks from 9.4 billions barrels a day, and are up 2.3 percent of number produce this time last year. (www.msnbc.msn.com July 25,2005) These events decrease the gasoline supply. Other factors that could affect our current supply would be refine outages, pipe line breaks, tanker spills and war in importing countries could increase prices even higher.
A change in the behavior of the consumer in find alternate means of transportation, such as bikes. The consumer could purchase solar power vehicles. People could change their life style to where they only work in place where they could walk to work. This would decrease the demand and force the price down. Because the American public generally value their luxuries, the possible of gas price decreasing due to consumption in rare. Even though we are reluctant to change our human behaviors we do love bargains.
The rise gas prices and the hunt for cheaper gas prompted the media to publish locations where you can find cheaper gasoline. By logging on to www.msn.com and selecting my car from the tool bar, you can enter your zip code and it will give you location in your area that you can find the lowest reported gas. As technology has made it possible for you to locate anything at your finger tips, you can locate the best price for gas in a particular area. We often tend to change the way we do things and change our route before we would give up the luxury of driving our personal automobiles.
In conclusion this economy revolves around the changes in supply and demand. The American economy depend heavily on the fact that Americans want what they want. In general Americans will even work harder to drive larger cars which consume more fuel. The realationship between supply and demand tend to counteract each other. As one factor go up the other go down. A there are a few instance when they cross and balance each other. The study of economics and supply and demand can help is to understand money supply and make wise business choice that can have a positive effect in trying or inflationary times.
- Colander, D.C. (2004). Microeconomics. New York: McGraw-Hill Education.
- MSNBC. (2005, July 25). Gasoline demand up 2.3% from a year ago. Retrieved from https://www.nbcnews.com/id/wbna8686092
- Al-Majed, S., & Burney, N. (2011). The impact of oil prices on the stock market: Evidence from Gulf Cooperation Council Countries. International Journal of Economics and Finance, 3(4), 176-187.
- Brown, S. P. A., & Yücel, M. K. (2002). Energy prices and aggregate economic activity: An interpretative survey. The Quarterly Review of Economics and Finance, 42(2), 193-208.
- Bureau of Labor Statistics. (2022, March 10). Consumer Price Index. Retrieved from https://www.bls.gov/cpi/
- Coibion, O., & Gorodnichenko, Y. (2015). Is the Phillips curve alive and well after all? Inflation expectations and the missing disinflation. American Economic Journal: Macroeconomics, 7(1), 197-232.
- Hamilton, J. D. (2009). Causes and consequences of the oil shock of 2007–08. Brookings Papers on Economic Activity, 2009(2), 215-261.
- United States Energy Information Administration. (2022, March 31). Weekly U.S. Regular Conventional Retail Gasoline Prices. Retrieved from https://www.eia.gov/petroleum/gasdiesel/
- Marlow, M. L., & Mansfield, R. K. (2012). The economics of natural gas: Shale gas drilling and environmental policy. Journal of Environmental Management, 113, 441-450.
- Oil Price Information Service. (2022, March 31). Daily Fuel Gauge Report. Retrieved from https://gasprices.aaa.com/