Gasoline prices may not be too hot this summer
As many people begin to make their plans for summer vacations, the commute to and from the destination tends to be the biggest issue. Government officials released that gas prices will be slightly lower on average this summer compared to last and the recent hikes in prices will soon come to an end. But on the other had economist do not see how this is going to be possible. One mentioned that the supply of gasoline is down from last year and the demand is greater then it ever has been. He also feels that many things will have to go very right in order for the gas prices to go in the direction the government predicts.
The only question is weather the price of gasoline really effects consumers decision weather or not to buy gasoline. It is said in this article that the price of gasoline has actually had little to no effect on consumption and the demand is steadily on the rise. The actual change occurs when gas prices are very high and consumers choose to by gasoline and tend not to spend their money on other things, which intern hurts the economy. In all reality the price of gas is not affecting the rate of consumption rather the consumption of other goods that boost the economy. In the end if gas prices continue to be high will there continue to be a drag on the economy?
7 comments:
It is clear that gasoline is considered to be a necessity and the consumption is inelastic. When the price goes up demand stays the same. I wonder if the price continues to rise to a point where middle class citizens (the average class of our economy) can not pay for gas, will alternate fuel be created or alternative transportation methods used. As suggested by the article, that may never occur and instead it will just drain the economy. There really is not a precedent for this in history so it is hard to tell. Although during the Great Depression when some people could not afford to feed their families the demand for gasoline was so high that it had to be rationed. Food was rationed as well but the point is that people could not afford food but there was not enough gasoline. I do think that an economic drain will occur as long as gas prices rise. People will spend more money on gas so that they can go to work that they might pack a lunch that day rather then contributing to the local venues.
Because of the specialty of gasoline, the demand of gasoline has been economically “inelastic”. The demand for gasoline has been inelastic because there is no substitutes for gasoline and people just cannot survive without gasoline, or say without cars. The increasing price of gasoline won’t have much influence on consumers like us, the folk. We are still going to have a family trip by car anyway. From this point of view, we may say that the economy won’t be affected by the rising price of gasoline. However, the economy is not just about the folk. Airline companies are buying gasoline; factories are buying and countries and countries are buying. They are the key elements in economy. The rising price of economy will and has been influencing the whole economy. The costs of travelling by air, the inflation, and the issues between countries have been shaking the economy vigorously.
I feel that gasoline is a resource that we will aways use and always need. The prices climbing will not affect the sale of gasoline all that much because the revolves around it. Some people dont realize how dependent they are on gas and how often they use it daily or how much of it that they use . It is something that no matter what it cost, we will always pay for it one way or another.
It seems clear to me, the United State's needs to look into alternative energy options as soon as possible before demand rises beyond supply. As gasoline continues to be an inelastic good for most people, buying gas is not an option.
High gasoline prices effect the economy. With highr prices on gasoline, it effects how much the average consumer spends on other goods and services. This could lead to a downturn in the economy and a loss of jobs for many, especially those who work in the luxury industries.
As gas continues to rise, I don't believe it will affect consumers in the sense that it is a necessity and there are no other options. In my opinion as the price rises, the demand remains unchanged; therefore, it is inelastic. However, these high gas prices do affect our economy.
The price of gasoline definitely effects the economy, as well as consumers decisions regarding gasoline. If a family was thinking about taking a trip to the beach in their SUV and suddenly the price of gas spikes to $3.50 a gallon, they would more than likely decide to find something to do closer to home. The rise in gasoline does not so much increase the revenues of the manufacturers, because oil is mostly imported from other countries. I do not believe that people decide not to buy gas at all because there is no way one could live in the world of today without it.
Gasoline is inelastic to a certain point, but I think that price does affect it making it somewhat elastic. People do cut back on consumption of gasoline when it goes up higher and when it is down really low, people are more carefree with it. But, people are still goint to use it, even if it is very minimally, when it goes up high. but, if it goes up ridicuously high, then people might stop buying it altogether and might switch to alternate forms so for the most part gasoline leans towards elastic.
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