Econ

Microeconomic Issues: 1 Gasoline is bingle commodity that is instantly moved(p) by convey and supply. Currently the average bell for gasoline in the coupled States is $4/g all(prenominal)on (4). Prices are unfree upon the price of a barrel of crude crude oil colour color, the study office of burn outoline. Barrel prices are also a reflection of posit and driven by rising orbicular get and policy-making instability in several oil producing countries (3). Over one-half(a) the price of gas per gallon may be accounted for by the price of crude oil; the remaining components may include transportation costs, production, taxes, and retailer costs. Given the supply and demand components, gas prices are consistently changing on a periodic basis. The integrity of demand principle is when price increases, measuring stick demanded should fall. in addition when price decreases, quantity demanded rises given that all factors are held constant. The law of natu re of demand is hard to check to gasoline prices due to the determinants of demand are forever fluctuating. ace major determinant for gasoline is the prices of related goods. The most prevalent related good for United States is transportation. Living in Texas one may consider Texas the heartland of trucks and large vehicles.

What I have detect is many are forgo larger vehicles due to price of gas or pursuance alternative fuel options such as hybrid or electric vehicles. Thus, consumers are diminish the demand for gas in this particular area. This may firmness in a swap of the demand curve On the other side of demand is supply. The law of supply states that higher(prenominal) pr ices will lead producers to offer much of t! heir products for sale during a given period. If prices fall, producers will offer less products to the market. Supply has determents as well. Costs of resources is one determinant that heavily affects gas prices. As previously mention crude oil accounts for over half the price of gasoline. Recently Libya has gone into war. This greatly effects oil production because Libya is...If you want to get a full essay, monastic order it on our website: OrderEssay.net

If you want to get a full information about our service, visit our page: write my essay