eventually businesses will have to pass increased transportation costs on to consumers.
2007-05-23 05:47:43 · 3 answers · asked by cashcobra_99 5 in Social Science ➔ Economics
The equilibrium price per gallon (based off inflation only) should be $2.61-$2.70.*
This doesn't account for the SHORTAGE of refineries. Typically a shortage in supply will cause MORE Demand. More demand will cause a greater shortage and will spiral until those demanding cry "Uncle".
Above the price of $2.70/gallon of refined gas ... will cause inflation to the USA economy. Gas IS NOT part of major Economical models. It is considered a "Lagging Indicator", especially in regards to refined gas prices.
Solution to your pains ... dump SUV's & Gas guzzlers & buy European & Japanese cars (not tanks --- CARS) with fuel efficiency. As a consumer EXCEED Pres. Bush's call for getting 25-30 MPG on vehicles ... DEMAND 30-50 MPG for business & personal use from Ford, Chrysler, Toyota, who ever is up for the challenge!!!
Follow UPS's ingenuity and never make a left turn saving millions $$$ yearly. Cut down driving time ... re-vamp J.I.T delivery systems. Have companies like Johnson & Johnson partner with Ford to create efficiency. It can be done!!!
2007-05-23 06:24:40 · answer #1 · answered by Giggly Giraffe 7 · 0⤊ 0⤋
The price of fuel, while it may cause prices to rise, does not cause inflation. Inflation is created when a government prints too much money. When there is too much money in circulation, money is worth less in goods and services. Jimmy Carter proved that.
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2007-05-23 12:57:44 · answer #2 · answered by Jacob W 7 · 0⤊ 0⤋
A shortage doesnt increas demand, it just increases price through decreased supply
2007-05-23 17:16:20 · answer #3 · answered by Anonymous · 0⤊ 0⤋