http://www.canada.com/vancouversun/story.html?id=6bbbbce7-4968-4a3e-8766-2fa405aa9eab
This article from The Vancouver Sun talks about the rise of gas prices in relation to hurricanes Ike and Gustav. Back in September, gas prices shot up when hurricane Ike struck, and since then, there had been debates about whether the soaring prices were due to the weather or gasoline companies taking advantage of it. Industry analysts claimed that the blame was to be put on the shortage in supply of gasoline and energy analysts said that it's a matter of supply and demand. Canadian politicians debated this, offering their opinions on what they would do to consumers who were faced with this price hike.
The connection to Chapter 2 of Economics is the concept of supply and demand. Supply refers to those who are willing to sell a good or service while demand refers to those who are willing to purchase a good or service. In the article, Liberal leader Stephane Dion states that "the main reason why the price of oil is set to go up ... is because humanity is asking for more and more oil, [and] you have demand that is booming much faster than the supply." In the case of this article, consumers are demanding for more gas, yet suppliers are more reluctant to sell it at the same price because of the hurricanes, hence the price hike.
I have noticed the significant rise in gas prices since the beginning, but since I don't own a car, it doesn't directly affect me. However, I know that it obviously affects other people who do own cars and rely on it to get to their destinations. Perhaps the whole concept of supply and demand and rising gas prices will make drivers think twice before driving their cars everywhere and also about the impact of driving has on the environment. I do wonder though, if or when I decide to purchase a car in the future, whether or not the price of gas would've skyrocketed some more. If so, is it because of supply and demand or just a way of trying to force people to drive less, and if not, would the demand for gas have gone down?
1 comment:
I agree that the oil price is rising up because of the supply and demand. The effect of the hurricane causes the supply side to have a lower quantity and also the consumer side is highly demanding for it. Even if the price is really high, I think consumers would purchase oil anyways because they depend on it and also how oil is a complementry product. Although I dont have to pay for gas for the car, I still drive a car and I notice how gas is used up really fast. Even though the gas price is high, I always see my parent filling up their gas tank and that's because they depend on the car and gas to get to work.
-M.Man
Post a Comment