Posted by:

sammylou23
Rating (2184): A
Questions Asked: 2
Tutorials Posted: 2020, earned $45,457.51

 

A:

Preview: ... h may be slight or not) which causes the equilibrium price to go up. Then demand is increasing because of worldwide needs for booming economies like India and China and our of course which shifts the demand curve to the right (increase) and leads to yet another price increase. That explains why increase in oil prices has a really big effect on prices going up. If demand increased at a slower pace or supply decreased a lot less then this wouldn't be the case.<br>Now, when oil prices go down, then the supply curve shifts to the right but not as much because usually drops in oil prices are minimal. Yet, the demand curve still does the same because of the expectations of the people in newly emerging economies, causing the increase in demand to outweigh supply and prices go up but no as much as when supply decreased. Plus prices are sticky. For example, anyone will always take a pay raise, but even if it was explained to you that a pay cut is necessary to keep costs low, you wouldn't take it. So when normal market forces would lower the price of oil, cartels <br>Page Four<br><br>like OPEC collude to keep quantities at certain levels in order keep oil prices from dropping too much, especially since they play a big factor on the supply side.<br>Treat the two scenarios separately. You will see it's a demand side problem unless supply can be greatly increased which won't happen because oil prices are high elsewhere which means our drilling companies won't have incentive to sell just domestically. The world is becoming more globalized in economic terms, this means that trying to cut back our demand will not have as great of an effect as it normally would since most automobiles in the world are here, but this is changing. And unless alternative resources are as profitable as oil, then producers will have no incentive to shift to that in the near future. That's how the market economy works.<br>So we have interesting opposite impacts. On the one hand, price is driven up artificially by forcing consumers to pay the tax. On the other hand, the ensuing decrease to demand should drive prices back down. I don't think we can really know what the equilibrium price would have been in the absence of the tax. It would not be surprising if it would have been near to what the current price is anyways. The only change is a redistribution of wealth between consumers, oil and gasoline producers and the <br>government. When you add in direct s ...

The full tutorial is about 1997 words long plus attachments.

Attachments:
Gas and Oil Prices.doc (46K) (Preview)

Posted by:

mastermindju26
Rating (9): C-
Questions Asked: 2
Tutorials Posted: 72, earned $317.39

 

A:

Preview: ... will maximize profits. O.P.E.C. has attempted to raise prices several times by cutting production. <br>According to economic theory, a decrease in supply will yield higher prices. These are some of the reasons The United States must offer stability and continue to have troops in the area, intervening when the worlds oil and its prices are in jeopardy. Currently crude oil prices are rising due to the bombings in Saudi Arabia. …It has continued to soar, to more than $24 a barrel, up 34% from one year ago, the highest level since the 1991 Persian Gulf War. (3) This increase has been contributed to several factors: 1) the rising demand of crude oil throughout the world 2) the tight inventories because of the belief that supplies are going to run low 3) the current turmoil that exists in the area and 4) heating demands of the abnormally cold winter. These factors have already raised the prices of diesel fuel, jet fuel, and home heating oil. This is of major concern to truckers, airlines, and home heating oil companies. As a result of these price increases, airline ticket prices will also increase. These are just a few of the elements that effect prices, but none of them have the power to greatly change the price that exists at the pumps. The demand of crude oil is always cyclical. The United States demands more gasoline in spring and summer months than in the fall or winter, due to people driving more. The current trend in vehicles moved to larger sport utility vehicles from small economy cars of the past and consume more gas and get less miles per gallon. (Tristam, 2008) The country is constantly searching for new and more efficient forms of energy. More importantly the country is searching for means of energy that will not make Americans poorer. However, the fact remains that if Iraq indeed decides to renew oil sales, will prices really drop? Even if Iraq gets back into the business of selling oil, it would be unlikely to cause a drastic shift in the price of a gallon of gasoline. Saddam Hussein’s actions have not been stable in the last few months. Iraq was supposed to begin exporting on Memorial Day, but due to erratic behavior, talks have been put on the back burner. Since there are so many factors involved, even if Iraq exports a tremendous amount of oil, consumers will probably not know the difference. Other factors, other than the demand and price of crude oil in the world effect prices. ...

The full tutorial is about 2040 words long .

Posted by:

gallen765
Rating (369): B+
Questions Asked: 15
Tutorials Posted: 3233, earned $11,086.13

 

A:

Preview: ... per grade ...

The full tutorial is about 9 words long plus attachments.

Attachments:
COM 150 Gas and Oil Prices.docx (14K) (Preview)