This past year the gas tolls or so the United States have gone on quite the ride. flavour bear to January 2012 price per gallon was right around the third dollar and thirty cent bleed, it quickly climbed, reaching quad dollars by late march. Upon entering May prices fell steadily until they reached three dollars and sixteen cents in July, soon after they climbed back up to the mid three dollars and sixty cent range (Saefong, Drivers May Have…Gas Pump) Despite the fluctuation of the price of gas, the quantity prayed still stays relatively close to the selfsame(prenominal) no matter what the price is be set out we still need evoke for transportation. However the higher gas prices this past summer did cause many families to wait until after Labor Day in order to let gas prices fall to addle their family holiday a little bit more(prenominal) affordable.
The driving big businessman behind the price of gaseous state this summer was the drought in the mid-west. The dry weather hit the corn crops, is used to make ethanol, a key component in todays gasoline. The drought caused the price of ethanol to rise almost fifty cents per gallon (Saefong, Drivers May Have…Gas Pump), and since all gasoline has at least ten percent ethanol in it, this caused the price of gasoline to climb around twenty more dollars per barrel.
The problem with the price of gas climbing is that it caused people to restrain going on long distance vacations in their cars causation the quantity demanded of gasoline to go down. However, Gas companies still feeling that the demand for gasoline was going to increase because of the holiday disrespect the price of gas per gallon rising almost 31 cents. This caused a shift in the graph to the left, demonstrated by Graph A.
The gas stations quickly saw the demand going down so they lowered the price at the pump in attempt to increase the demand. Eventually, since the price was lowered, an economical equilibrium was reached and the demand for the gasoline went back to...If you want to get hold a full essay, order it on our website: Ordercustompaper.com
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