Everyones Gasoline Problem

977 Words Feb 10th, 2013 4 Pages
EXERCISE 1
QUESTION 1. Everyone’s Gasoline Problem

It is a fact that gasoline prices can become high enough that consumers will make

substantial reductions in their gasoline purchases. Depending how much prices increase

relates on how easily consumers can adopt to substitutes for gasoline . This would

include taking public transportation. Studies have reported that consumers do not easily find substitutes for gasoline, and that prices must increase significantly to cause

even a relatively small decrease in the quantity of gasoline consumers want.

Gasoline is an inelastic demand , better explained by a “situation in which a price change leads

to a less than proportionate change in quantity demanded.” (
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The companies are then required to pay for a yearly independent audit to examine whether those internal controls remain in place. There are new requirements detailing how over the end-of- fiscal-year financial reporting should be conducted, as well as regulations on how to safeguard company assets and how to test and evaluate company management each year. These requirements place a burden on publicly-traded companies, particularly smaller ones, and have led to some smaller companies deciding to leave the public realm to save the costs brought on by following the Sarbanes-Oxley Act and its provisions. A number of companies have gone private to avoid the provisions of Sarbanes or have gone dark, which entails removing all shares from any public trading and deregistering the company's securities. Other small companies burdened by the additional costs of
Sarbanes have sought mergers with larger companies. This type of business policy
Would also effect the NYSE and NASDAQ. This would overall drive business away
From these agencies because of increased economic costs.
By the creation of Sarbanes-Oxley this is nothing more than another creative tax on

business. Taxation policy affects business costs. It is clear in business that a rise in a

business’s taxes has the same effect as an increase in fixed costs.

Businesses can pass some of this tax on to consumers in higher

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