Gas Price Elasticity

Abstract: A 5 page paper discussing gas price elasticity in light of the record-breaking prices of the summer of 2000. A product of high elasticity is one that exhibits significant response to the laws of supply and demand. Unfortunately, gasoline is not one of those products. Consumers may change travel plans when prices exceed $1.50 a gallon, but gas is seen as a necessity for everything but vacation. Although alternatives are slowly becoming available, few exist in 2000. In addition, gas purchases account for only a small fraction of available income. If any or all of these conditions were different, then gas would be a more elastic product. For the present, it remains a product of low price elasticity of demand. Bibliography lists 7 sources.

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Catagory:

Subcatagory: Economics And Economic Theory

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