A. Butler university of Phoenix Icon / 365 On the subject of consumption patterns this brief study will focus on how the fluctuations of gasoline prices effects this products economic trends. The study is from an article from Octane Week in December of 2008. [cite article] If you can remember, gas at that time reached an average of almost $5 per gallon and even higher in some localities.
This study will focus on the utility derived from the product, he changes In demand, the changes In supply, and the price elasticity or Inelastic of the product. Since the utility of a product is “the pleasure or satisfaction people get from doing or consuming something”, [ cite text] the utility of this product is the ability of consumers to drive their automobiles and other combustible machines, as often and as far as the wish. Economic slow periods, according to the article raises prices which in turn raises the prices of everything else including fuel.
When the cost of fuel goes up then the consumption goes down. In 1979 through the early 1 ass’s. During economic conditions that closely resemble the economy of 2008, there was also a drop In US consumption of fuel. [cite article] Although global current events can change without a moment’s notice, fuel supply seems to be plentiful, and the number of vehicles on the road is ever Increasing. This means that supply and demand should remain stable without any fluctuation in price for gasoline.
According to the text, “market equilibrium is a concept in which opposing dynamic forces cancel ACH other out”. 1 cite text] Therefore market equilibrium can only occur when economic conditions are stable so that fuel costs do not rise along with the cost of everything else. According to the text, a product Is consider to be elastic If the percentage change in quantity is greater than the percentage in price; a product in considered Inelastic If the percentage change in quantity Is less than the percentage change in price.