Especially when demand surges unexpectedly, as in 2004, OPEC decisions on whether to increase supply to meet demand can have a significant impact on the world crude oil prices” (Federal Trade Commission, 2005) . When the demand increases, OPEC countries can’t increase the quantity supplied because that will make the oil reserves go out soon. In addition, they also have quotes in place. There are, price is raised to lower the demand to the quantity supplied. Demand in oil also explains why gasoline price fluctuates.
When demand decreases, gasoline price decreases, just like what happened in 1980s as stated “As gasoline prices began to fall in the 1980s, U. S consumption of gasoline began to rise once again. In 1993, U. S. gasoline consumption rose above 1978 levels, it has continued to increase at a fairly steady rate since then. In 2004, U. S. gasoline consumption average about 9 million barrels per day” (Federal Trade Commission, 2005) and it’s forecasting to continue to rise in the future. Chapter 8 Question 11 Internet is surely creates a lot more competitive market for firms.
Internet retailers often don’t pay for expenses like building, space and shelves. They also don’t have operating cost to maintain a store like brick-and-mortar business models. Internet firms surely save a lot more money than traditional retailers and that allow them to better allocate resources to buy more products, diversify goods and invest into marketing. The competition between online retailers and retailers are becoming more stiff while traditional retailers such as Wal-Mart is preparing to be more competitive on online realm.
The Essay on Rising Gasoline Prices Oil Iraq Consumers
By Joe McManus In these times of war threats and terrorism, it is becoming extremely difficult for United States diplomats to maintain friendly relationships with oil rich countries. As a result, the U. S. economy may be faced with a possible oil shortage and continuous rising gasoline prices. As stated in the article "All About the Oil", Time Magazine "Iraqi exiles flew into Washington, D. C. in ...
Although revenue from online selling is still less than that of brick and mortar stores, the situation is expected to be overturned in near future. For instance, Amazon only had 48 billion in revenue in the most recent fiscal year, less than 9 times compared to Wal-Mart with 419 billion dollars (Zybowski), however, “The online mall’s revenue increased 40. 6 percent in its most recent fiscal year, compared with a growth of 3. 4 percent at Wal-Mart. Amazon’s shares have jumped 15. 4 percent since the beginning of the year, while Wal-Mart has seen its share price rise 2. percent” (Zybowski).
It can be seen clearly that with the growing of online websites, the market will surely be competitive and achieve the perfect competition in near future. Chapter 3 Question 15 When the production of orange crops in the U. S. falls, we can expect the orange price will increase because supply can’t meet with demand. When the production falls, suppliers can only supply small quantities of oranges and therefore, prices have to increase so suppliers can get back their money. As the price increase, demand will decrease.
When President George W. Bush pushed the production in ethanol, he has increased the demand for stalks, leaves from corn and other grasses. Because the demand increases and there’s no saying about the supply, base on the demand and supply curve, we can expect the price of stalks and corn leaves to increase. As the price increase, suppliers will increase their production to meet new level of demand. When supply exceeds demand, price will go down. Supply and demand curve will go back to its original equilibrium.
