Essay on Mmg 550

Submitted By kristen75
Words: 983
Pages: 4

Usually the world market’s price of the oil or gasoline make the standard of the said prices because of the fact that it regulates the price of the oil itself from the oil firm to the businessmen. If the world market dictates that the oil price should increase then all the oil companies will eventually increase and the retailers as will add on the appropriate amount that they should increase regarding the gasoline price itself. Secondly, the forex exchange which is also considered as the primary indicator of the currency exchange against the US dollar will determine regarding the price of the oil and gasoline in the market. If the economy is also doing well, the market will dictate a stable or lower price of the oil or gasoline thus the consumers will be happy about it. But if the economy is bad, the gasoline or oil prices will eventually be affected and it will surely go up making all the automobile owners and consumers suffer with its price increase. Other reasons can also include the fact the price may rise over a holiday weekend, also supply and demand can set the market price of gas.
Living in St. Louis a person can see gas prices change once a day at least sometimes two. Many people complain to gas station workers about this and the reply is always it is out of their control. This is true they don’t set the price for the fuel. In the city gas seems always to be cheaper on Tuesdays, Wednesdays, and Thursdays. Most people think this is because it is in the middle of the week when less people are traveling. Over the weekend when people are off work and able to travel there is usually an increase of at least ten cents in the price. Another factor is the location of the place where the fuel is being bought. To explain this look at different cities in the same state and all the prices will vary to somewhat an extent. Lake of the Ozarks a tourist area is usually ten to fifteen cents higher a gallon then the city.
Lately it seems as gas has a much higher demand than supply. This can be seen in the gas prices. Averaging about 3.06 a gallon to date now where back in 1994 gas was .79 cents a gallon. This shows that the supply of gas may be depleting causing the increase in price over the years. At the lake they also have places to buy gas on the water for boats. These places will charge almost .30 or more a gallon more than stations not on the water. They can do this because there is a huge demand of gas for the boats and not very many places on the lake where it can be bought.
Chapter 3 #15 Both of these events would cause the demand for the products to go up therefore making the supply less and raising the prices of each. CNN stated this comment about the freeze, "There is not going to be one supermarket that is not impacted by this disaster," and consumers should expect to see price increases in whole citrus fruits by early next week.”( Blakely, CNN) During this time the demand was great for the fruit but there was no supply therefore they had to raise the prices. Someone may think that since they raised the prices it would make up for the loss but in a reality they still lost millions of dollars that year with the freeze. As for ethanol and corn it has been argued by both parties that some say the demand has made prices go up while others think there is no effect.