Article Analysis of Gasoline Consumption Essay

Gasoline is one of the nearly demanded resources that Americans count on to get us from orchestrate A to point B in our vehicles, and it is also used to help us change our homes. Ethanol with accelerator can be combined for a intermingle blow outoline, which is better for some vehicles. The following information is from two obliges appropriate for this topic. In the first article, Trends in U.S. Gasoline and Ethanol Use, and Petroleum Production and Imports by Dr. Robert Wisner, a Biofuels Economist with the Agricultural Marketing Resource Center, states that Several decades ago, the U.S. was a net exporter of petroleum products. However, that picture has changed dramatically in recent days as gasoline consumption trended upward and environmental constraints on new-fashioned wells plus declining production from existing wells failed to keep railyard with rising domestic demand. U.S. verve policies in the early 1990s were alter to encourage increased production of biofuels , in part because of a thirst to reduce the nations estimateence on imported vegetable oil (Wisner, 2011). The demand for gasoline and oil is unbelievable.Some observers suggest that oil keep company collusion, anticompetitive mergers, or other anticompetitive conduct (not market forces) may be the uncomplicated cause of higher(prenominal) gasoline values. If the market price of gasoline is higher than the equilibrium price, a disallow lean in the demand and wrick pass oning result. The negative slope of the demand curve for buyers bequeath implicate that the step demanded will be less than the equilibrium quantity. A tyrannical slope of the supply curve for sellers will mean that the quantity supplied will be greater than the equilibrium quantity hence the quantity supplied will be greater than the quantity demanded. If the market price of gasoline is down the stairs the equilibrium price will result in a negative slope and if that happens, the demand curve ensures that there will be a greater quantity demanded than at the equilibrium price. A positive slope of the supply curve ensures that there will be a smaller quantity supplied than at the equilibrium price.Hence the quantity demanded will slip away the quantity supplied. This excess demand will force consumers to spend more than than time looking for sellers who have the goods available, and to spend more time waiting in line if they do find a seller with the good. These seek costs and queuing costs will lead some consumers to offer more for the good, and hence the price will tend to rise. Dr. Wisner also states in the article that future trends in the nations use of these fuels will depend on a number of factors including the health of the economy and employment levels, self-propelling technology, the rate at which consumers accept hybrid automobiles, and the possibility of a lancinating increase in government-mandated fleet average fuel mileage requirements in the years ahead that has recently been advocated by administration officials. Blending of fermentation alcohol with gasoline is mandated to increase sharply in the 2012-2022 period (Wisner, 2011).Price press stud of demand is elastic when the percentage change in demands is greater than the percent change in price. Inelastic is the opposite. So, I would have to say that gasoline is inelastic because the demand for gas is high and even though prices be rising, people argon still buying gas, just not as much as they want to purchase. If there are substitutes (such as electricity or liquid fuel) for a gasoline usually will be elastic. If there are no substitutes it will be inelastic because it is a necessity.I know that no one is happy about gas prices rising, but everyone sure does get excited when the prices drop. When the price of gas increases, consumers will not purchase as much of the product as they would when prices decrease. In the second article, Explaining the variation in elasticity estim ates of gasoline demand in the United States A meta-analysis by Molly Espey, published in vital force Journal states that Espey examined 101 different studies and found that in the short-run (defined as one year or less), the average price-elasticity of demand for gasoline is -0.26.That is, a 10 percent hike in the price of gasoline lowers quantity demanded by 2.6 percent. In the recollective-run (defined as longer than one year), the price elasticity of demand is -0.58 a 10 percent hike in gasoline causes quantity demanded to decline by 5.8 percent in the long run. In conclusion, if the price of gasoline continues to rise, there will be a decrease in the demand of the product. If the price decreases, there will be an increase in the demand of the product. When prices are high, demand is low and when prices are low, demand is high. The prices of gasoline will fluctuate because demand is always high.Referenceshttp//www.agmrc.org/renewable_energy/energy/trends-in-u-s-gasoline-and-et hanol-use-and-petroleum-production-and-importshttp//www.ftc.gov/reports/gasprices05/050705gaspricesrpt.pdf