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Essay

Ethics

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Issue:

Business

 

Written by:

Mark P

 

Date added:

October 19, 2016

 

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Grade:

A

 

No of pages / words:

1 / 255

 

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Essay content:

Gasoline, including gasoline blending components, moves from region to region. When crude oil and gasoline production were shut in following Hurricanes Katrina and Rita, the country's gasoline supplies were reduced approximately 10 percent. Gasoline supplies were moved to the Southeast from other parts of the country, affecting supply in those areas...
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That put upward pressure on prices, as supply was affected but demand remained high. The above case clearly shows how the shortage in supply increases price. In the same way Demand of the consumers reacts according to the prices of products following law of demand. In the case of gasoline, limited substitutes for gasoline restrict the options available to consumers to respond to price increases and therefore it can be said that elasticity of demand for changes in prices of gasoline is highly inelastic, gasoline consumers typically do not reduce their purchases substantially in response to price increases...
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