While watching the news the other day, the reporter was actually shocked that the demand for gas had not gone down with recent gas spikes. However, his coworker sitting next to him stated, "People still have to go to work and continue their day to day activities." But the reporter gave some bogus reasoning and continued his line of questioning. What's your take?
2007-05-09 16:16:30 · 10 answers · asked by Intrigue 1 in Social Science ➔ Economics
The demand remains relatively stable, as the quantity demanded drops in response to price increases.
Over time, as substitutes develop (motorcycles, electrics/hybrids, bicycles, relocating to downtowns, maybe realistic alternative propulsion systems), the demand for gasoline will drop.
As long as people can give up things they value less than gasoline, they will keep buying gasoline, even as its price increases.
Simple, but reporters rarely understand straightforward stuff that they can't spin in a political way.
2007-05-09 16:58:52 · answer #1 · answered by Yesugi 5 · 0⤊ 0⤋
There is a limit to gas demand going down ig gas price takes 3 yaers to treble. If next year gas price becomes $9 ( I hope it goes down to $@2), the demand will simply fall because people will start going to work by car pooing arrangements , go to groceries/ malls/ weekend outings x times a month instead of 2x times. But if gas prices takes another 4 years to reach, gas demand may not come down as incomes will increase and people may curtail consumption of some other things. Issue is not whether, high gas prices will reduce demand or not, the issue is if people consume gas at the same level or more or less, people will have to pay higher gas prices in future. There is no way out. Alternative fuels will be required. Rich people will have electric cars, highly expensive ones.,
2007-05-09 17:34:41 · answer #2 · answered by sensekonomikx 7 · 0⤊ 0⤋
First of all, price never changes demand. Demand is what it is. A change in demand can change price, but price can not change demand. Demand is like a list that shows at all price levels how much of a quantity will be purchased by consumers at each price. As price rises, the quantity at the current demand will be lower, but demand it self will remain unchanged. Things that change demand would be like more fuel efficient cars, alternative fuels, easier access to public transportation.
Personally I really enjoy driving my truck around freely where ever I please, and I would be willing to pay up to $4 a gallon to fill my 35 gallon tank 3 times a month (or 105 gallons per month). But thats the personal value or demand I place on drive my truck.
If the price of gas rises over $4 a gallon my demand does not change because at say $5 a gallon I am also willing to buy gas but maybe only one and a half 35 gallon tanks (or 52.5 gallons per month) instead of 105, so I will do everything to reduce driving.
If a more fuel efficient truck comes out and I purchase it my demand might fall to say $4 a gallon per 35 gallon tank but only twice a month (or 70 gallons per month), so my demand would fall by $4 a gallon for 35 gallons a month.
2007-05-09 19:24:18 · answer #3 · answered by Economics Guy 3 · 0⤊ 0⤋
Actually the bet is that oil will go to about one hundred a barrel over time. The supply will not be able to keep up with demand in a few years time and the only way to curb this is through increased prices. George Soros (riches technical investor in the world) and I forgot his name but also Americas richest oil speculator has made bets on this already by making heavy investments in the oil and natural gas industries in the last few months supposedly.
2007-05-09 19:45:45 · answer #4 · answered by Dean * 4 · 0⤊ 0⤋
When a charge is placed on carbon emissions that reflects the true costs of the pollution caused by the consumption of fossil fuels, the demand for gasoline will decrease and the demand for alternatives will rise. Belief has nothing to do with it.
2007-05-09 16:31:30 · answer #5 · answered by sunny d 2 · 0⤊ 1⤋
If gas prices stay high people will gradually replace cars with more fuel efficient ones, and demand will fall. Very few people will cut back on driving, so short term, demand will fall very little.
2007-05-09 16:31:26 · answer #6 · answered by meg 7 · 0⤊ 0⤋
I dont think the demand for gas is going to change. Like the coworker said, people do have to go to work, and live still. Even if they didnt do any extra running, people need to drive in order to get their groceries, or to get the necessities to live.
2007-05-09 16:25:27 · answer #7 · answered by faithhopelove82 1 · 0⤊ 1⤋
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2016-11-26 23:19:21 · answer #8 · answered by ? 4 · 0⤊ 0⤋
As long as gas is limited and needed to fuel cars and whatnot, the demand will not go down.
2007-05-09 16:24:14 · answer #9 · answered by Stephanie 4 · 0⤊ 0⤋
I now only drive 2 days a week , I am retired
I have rehab which helps me. I plan everything around my rehab trip
2007-05-09 16:26:34 · answer #10 · answered by Anonymous · 0⤊ 0⤋