Gas Price Climbs for 10th straight week.
At the end of the week Apr 9th gas was averaged at 2.80 a gallon for regular gas, up 10 cents from the previous week and is currently up a 11 cents compared to a year ago. The biggest jump was in the midwest states. However California has still payed the highest where gas is over 3 dollars a gallon.What has caused this increase to occure months before peak summer travel is the decline in the U.S Gasoline Inventories before the summer season. Prices usually rise in the summer due to the increase in demand for travel. With this sudden increase in gasoline in the past week, how will this effect the peak summer travel season only a few months away.
5 comments:
I think that the fact that the prices of gas are continuing to rise is not going to affect summer travel. There are still people that have to commute to work, summer school, etc. Gas is nearly a necessity in today's world. There aren't many small towns anymore where you can walk to work, class, or even the grocery store. So no matter how much the gas prices go up, demand will still remain close to the same. It may decrease slightly due to those that have found ways to conserve, but overall, people will still buy gas.
I agree with Jessica. Gas is a necessity, it has no substitutes. Therefore the demand curve of gas should be very inelastic. For this reason, when the decrease in inventories shifting the supply curve to the left leads to a much higher market price, the quantity demanded at the equilibrium point will reduce less than the percentage changed in price. Moreover, owing to the inelastic demand of gas, we can predict that the increase in market price will result in an increase in total revenue.
Increase in gas prices isn't going to effect travel as soon as this summer because they have already went beyond this price before. Gas is always in high demand because it is a necessity; therefore, the demand curve should be inelastic
Definitely, Gas is a necessity. So increase the price of gas may do not to affect summer travel, because the demand curve of gas is inelastic. But I think when the price of gas to be increased much higher, it should be affect that people use cars time. Even someone maybe change their transportation to go to work or school, like to ride bicycle or ride public transportation.
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