Essay about Project Part 1 Gasoline

Submitted By wndycitie
Words: 873
Pages: 4

Business Economics GM545
November term

Gasoline prices fluctuate due to many circumstances” it may seem like common sense, but where you live helps determine how much you will pay for gasoline. The closer your home is to the Gulf Coast, the lower your gas prices will be. That is because the transportation of gas to stations throughout the U.S. is expensive, and that cost is passed on to consumers like you in the form of higher prices. “(Rosetta, 2012) the article refers to how each location can have an effect in how the price will be charged in each location. If you live close enough to the gulf coast you will be paying less for gas than those who live farther away this is due to the fact that the transportation to get the gas to the different stations costs the different gas stations. This cost is dispersed onto the consumers causing the fluctuation in gas prices. Taxes also play a factor in gas prices as each state and city has a different tax rate that will cause the fluctuations in price. For example Chicago taxes are higher than in the suburbs causing the price of gas to increase as well.
Other ways that the prices fluctuate is because of the rise in car sales and due to this the consumption of gasoline increase causing for the prices to rise. Supply and demand comes into play here because where demand increase for an item the price will increase as well. One of the reasons for the price surge was the increasing number of car buyers and car manufacturers as a result of expanding economies in China and India. This increase in demand for gasoline hypothetically caused the U.S. gasoline prices to skyrocket over four dollars per gallon (Stanford, 2010). It can be assumed that gas prices fluctuate due to many factors such as increase in car sales and the demand of gasoline by the consumers. Consumers will pay for the gas no matter the price because it has become an essential part of everyday living. Consumers will come up with alternatives way to get to their destinations they will car pool or purchase vehicles with better gas mileage to combat the rising gas prices.
Chapter 3 question 15 A decrease in the orange crops in the east and the freeze in the corps of the west create a low supply of oranges for the consumers. This lack of supply will not be enough to meet the demand and with a low supply it will cause the prices of oranges to rise. By increasing the need for ethanol the demand for corn and other grasses will increase. This will cause the supply of corn and other grasses to decrease and cause the prices to rise to help slow down the demand. Both of the decrease in the supply of these foods will cause an increase in prices. To alleviate the production of both items will need to be increased to bring about equilibrium between supply and demand. Also the demand for both would increase due to the low supply also causing a spike in price of the crops.
Any way you look at it with the weather affecting the oranges the supply is decreasing causing demand and price to increase and with corn and other grasses the demand will increase causing price to increase because they are going to be using…