Essay Writing on Gasoline Prices in USA

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Essay Writing on Gasoline Prices in USA

While writing essay on gasoline prices in the United States, you should conduct the research and include statistical data to support and/or illustrate your points with facts, figures, and tables.  .  It will make your essay more comprehensive and interesting to read. For example, you may write about the consumer price index, the effect of supply and demand of oil on the price of the gasoline.  You are encouraged to consider other influential factors while writing essay on gasoline prices in US.  If you need essay writing help on gasoline prices in USA, do not hesitate to rely on our essay writing editing services. Our essay writers are experienced in delivering custom written papers, essays and dissertations.  If you have no time to devote to essay writing or have no access to the statistical information and other sources, our writers are here to help you at any stage of essay writing process.  Numerous students have already benefited using our essay writing services and you can take advantage of our professionalism as well.

Essay Writing on Gasoline Prices in USA: Sample

Are you frustrated with the soaring increase in gas prices? Who sets these gas prices and when will they stop rising? These are all common concerns of gas consumers with many theories attempting to explain the pricing behaviors of the gasoline markets. Currently, the price of gas has jumped to twice the amount it was just four years ago. These “higher gasoline costs are cutting into consumer spending, which accounts for about two-thirds of

Where does your money go?

When pumping your gas, do you ever wonder where your hard-earned dollar is going? In effort to clarify some of the misguided issues regarding gas prices, let us begin with where our money goes at the pump. These percentages represent the costs to produce and deliver crude oil to refiners; refinery processing costs; federal, state, and local taxes; and lastly, distribution costs. As you can see, crude oil accounted for half of the price. There is no question that oil companies are benefiting from higher oil and gasoline prices. However, before you start blaming oil companies for the increase in these prices, remember one simple economic principle: supply and demand, popularized by Adam Smith's “invisible hand” in his publication, The Wealth of Nations. Although gasoline wholesalers and refiners undoubtedly clutch market power, suppliers do not control prices. “Nowadays, pump prices are determined far more by supply and demand for gasoline than by how much traders buy and sell crude for on the open market. Forget everything you ever learned or ever read about the connection of crude oil prices to gasoline, because there is a disconnect today”

The Principle of Supply and Demand

The principle of supply and demand describes the relationship between market price, the demand for goods by consumers, and the supply of goods by sellers. In commodity markets, supply and demand are generally balanced by the price mechanism; this is the law of supply and demand. Buyers and sellers react to price indicators given by the market. Although supply and demand are characteristically utilized together, they are actually two separate components.

Determinants of Demand

Demand is the quantity of a good or service that a consumer is prepared to purchase. The law of demand states that when all variables are held constant and the price of a good climbs, the demand quantity falls, and when the price declines, the demand quantity rises. However, there are many factors that affect the demand quantity and price of a product or service. For example, population, competition, consumer's income, personal preference, and future expectations tend to alter the relationship between the price and the quantity demanded. Any change in one of these factors shifts the demand curve accordingly (Mankiw, 2007).

For instance, with hurricane season currently underway, consumers recognize the possibility that a hurricane could hit the Gulf Coast and delay the refining production and limit supplies. Thus, expect gas prices to rise. Based on the expectation that a potential hurricane could possibly destroy or damage the refinery, consumer's demand for gasoline will increase and they will want to fill their tanks before the prices start to increase. While there are certainly numerous factors as to why the gas prices increase when any change occurs in the market, consumers still complain about the gouging prices.

Determinants of Supply

In contrast to demand, supply is viewed from the aspect of the seller. Supply is the quantity of a good or service that a seller is willing to sell. The law of supply states that when all variables are held constant and the price of a good climbs, the supply quantity also rises, and when the price declines, the supply quantity falls too. Comparable to the demand cycle, various factors including input costs, technology, the number of sellers, and future expectations can influence the supply and price of a product. Any change in one of these factors shifts the supply curve accordingly (Mankiw, 2007).

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