I am doing a debate with my friend and the topic is: Gas prices should be high when there is a shortage of oil. We are for this argument. (So it's basically from the gas company's POV) Anyone know anything we could say to help us win?
2007-01-17 22:51:03 · 6 answers · asked by untilyoucamealong04 3 in Social Science ➔ Economics
When gas prices go up people consume less. If there is a shortage and gas prices stay low gas stations would run out of gas like they did in the 1970's and long lines would form at the stations that did have gas. So instead of paying with money you paid with time, which was very inefficient. If you feel that gas companies are making excess profits you could impose a tax on them. Many economist are now proposing a tax on gas of $1 or $2 dollars a gallon to combat global warming, because the higher prices would cut consumption.
2007-01-18 00:10:57 · answer #1 · answered by meg 7 · 1⤊ 0⤋
It's basic supply and demand. When there is a shortage of oil (in other words an under-supply), the price goes up and producers have more incentive to produce more oil. This, in turn reduces the shortage and stabilizes prices.
Capitalism only works when prices are aloud to float freely. If we artificially regulate prices then resources will not be allocated appropriately.
Markets sometimes can appear irrational in the short run. But in the long run they always correct themselves. We are seeing the correction (and perhaps overcompensation) in oil prices now.
2007-01-18 07:40:18 · answer #2 · answered by Understood 3 · 1⤊ 0⤋
(I'm assuming you mean "gas" as in natural gas here, not gasoline).
Consider that natural gas can be used in place of oil products for power generation, heat, and even powering cars. So if the supply for oil is cut back, demand for gas (and coal and firewood and electricity from all sources) will go up as companies and people seek to replace oil products with gas (and the other alternatives). So even though the supply of gas may not be affected by an oil shortage, the demand for it will be, and prices should rise.
2007-01-18 06:57:09 · answer #3 · answered by Rusting 4 · 0⤊ 0⤋
When there is a shortage, yes because of supply and demand, (at the moment there is not and never has been a shortage) but at that point i think they need to be finding an alternate fuel source.
2007-01-18 06:55:12 · answer #4 · answered by sarah 5 · 0⤊ 0⤋
Boycott them. It wouldn't ever happen though. We will all continue to buy gas whatever the price. Learn to deal with it.
2007-01-18 06:53:26 · answer #5 · answered by Metal 4 · 0⤊ 0⤋
is bush's fault , that i.diot does everything wrong ,
2007-01-18 06:54:24 · answer #6 · answered by Anonymous · 0⤊ 1⤋