Xeco 212 Appendix B

Because even if the price increase or decrease it will not notably affect demand for the product. Gasoline is in demand because nowadays cars will never go out of style. Therefore, the demand for Exxon’s gasoline is elastic because Exxon is only one of many companies that sales gasoline, so there are many substitutes that have gasoline better or worst price.

A recent price shift that all American drivers have experienced is the constant fluctuations of gas prices. As I turned 16 in 2013 gas prices were on the rise ranging from $3-$4 across the nation. For many Americans it caused them to make economical decisions on what vehicle to buy taking on extra jobs to pay for gas, cutting out vacations because of the high gas expense. During 2013 I would even struggle filling up my dodge pickup every week and realizing how much money I was spending just on gas. However, in 2016 prices have decreased to $1-$2 dollars. If we look back on the history of gas prices we can analyze that reason gas prices change so often is based on the amount of crude oil. Since oil is the main input for producing gasoline, so if there is a rise in oil price than gasoline price must rise as well. Many factors go into affecting gas prices, but one example in particular is the detriment of

In the early 1800s gasoline was considered a useless by-product, but by 1913 was when it strived to where it is now. Gasoline is used to fuel combustion engines such as the ones found in automobiles, trucks, boats and other vehicles. Although this is the traditional energy fuel, it does have its defects that can potentially harm our lovely Earth. When we use gasoline it creates pollution that will eventually destroy our ozone layer that protects us from the sun’s rays. There are other alternatives that are useful and work similarly as gasoline does. For example, propane a liquefied petroleum gas. This alternative fuel could cost less or equal to the price of gasoline, but the benefit does outweigh the cost.

I agree there are not many substitutes for gas besides electric cars, which like you said is not feasible to most. It is true I think that most people still buy the same amount of gas even when prices go up simply because they have no alternatives. Some may opt to take public transportation or carpool but most would continue commuting to work in the same ways. Unless they live close to work then some may choose to walk or ride a bike. I also agree that imposing a tax would not have much effect on the demand for gas. If the tax was too extreme, some may compare the prices of moving closer to work.

1) How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is, do price and quantity rise, fall, or remain unchanged, or are the answers indeterminate because they depend on the magnitudes of the shifts? Use supply and demand to verify your answers.

After having conducted a deep analysis of all the demand and supply determinants involved in the industry of gasoline retail, we observed that the price elasticity of gasoline demand is inelastic. Therefore, there is a sign of an attractiveness of the gas retail market. In addition, the gasoline supply is very responsive to the price fluctuation.

TCO A- Illustrate how the price mechanism, in response to changes in other demand or supply factors leads to a new market equilibrium price and level of output.

When Sam 's annual income was only $15,000, he purchased 50 pounds of bananas a year. When his income rose to $18,000, he purchased 55 pounds a year. Therefore,

If a technological breakthrough occurs, making electric vehicles popular and cheap to purchase resulting in 50% of consumers switching to electric vehicles this will have a significant impact on the demand for the gasoline, which would see a decline of 50% (assuming that all consumers use the approximately the same level of fuel). If there is a decline in the demand for the gasoline, this will result in a demand for the oil used to make the gasoline, as shown in figure 1 below. If the supply remains the same but the demand decreases the price will decrease (Nellis and Parker, p119).

2. Use supply and demand curves to illustrate how each of the following events would affect the price

In recent years, the world 's appetite for gasoline and diesel fuel grew so quickly that suppliers of these fuels had a difficult time keeping up with demand. We all know the situation with gasoline prices for the resent several years. The prices for gasoline had been changed rapidly. Mostly increasing, while the demand for it did not. For example, gasoline prices by Feb. 2008 rose to an average of $3.13 a gallon, that is up to 40% from $2.24 in Jan 2007. ( with the price elasticity 1%/40% = 0,025), and up to 62% from 2003. (with the price elasticity 1%/62% = 0,016).

If we do not have gas in the car, the vehicle will not go. Without our vehicles, we cannot get around and we cannot get to jobs that earn us money. We have gone to more fuel efficient vehicles because the prices have gone up. Long gone are the days of people purchasing big gas guzzling SUVs and trucks because the prices have gone up and people are trying to save money where possible. If Edgar is planning on opening a gas station, he must understand that the prices will rise and fall which can lead to either profits or losses. He must also understand that because of gas prices, consumers will use more fuel efficient vehicles, which will cause a decrease in demand for fuel. Edgar is planning on also adding convenient items for sale in his store so that he can meet his customers’ needs. The drawback to providing those items is that they must be things that can have a long shelf life in case customers stop their patronage. The following graph from gasbuddy.com shows how gas prices have fluctuated over the past four years.

The first thing many people will do before deciding to go on a vacation is check for cheap hotels. Cheap hotels are the major driving factor that will decide whether or not someone actually goes through with the booking. Of course, we are not talking about the elite 1 percent who don’t care about finding the best hotel rates or car rental deals. In fact, for members of the upper class, cheap hotels are the farthest thing down their list of priorities when booking their annual vacations. In this case, we are talking about the middle class people who have to count the money in their bank accounts before making a decision like that.

People today are always complaining about something, and one popular topic is gasoline prices. The older generations reminisce about a time when gasoline could be bought for a quarter a gallon; a big difference compared to the three to four dollars being paid today. It does not help matters that America depends so heavily on foreign countries for our gasoline supply.1 And with the conflict in the Middle East, gasoline prices are as uncertain as ever; the prices rise and fall at the drop of a hat now-a-days. Because of these reasons, along with global warming, scientists have been experimenting with replacement fuel to take the place of fossil fuel. Some of the characteristics that scientists are looking for are availability and low

In 2000, the total fuel consumption for motor vehicles in the United States was 162,554 million gallons of oil. After 12 years of price increase, the average price of fuel in 2012 was $3.68 with fuel consumption reaching 168,395 million gallons. The estimated price elasticity of demand for the years 2000-2012 is 0.025 and therefore price inelastic. As shown in the graph, over the course of 12 recent years, there hasn’t been much change in gas consumption. Despite some years having a drop or rise in gas prices of almost 30%, the greatest changes in year-to-year consumption have only been about -4% and 2.4%. Although gas prices can increase greatly, they remain an important part of getting around.