Demand Function of Gasoline Cause and Effect Essay

Demand Function of Gasoline
This paper is designed to show the demand function of gasoline in the United States and how it affects consumers' buying decisions and automobile manufacturers.
# 117054 | 888 words | 5 sources | MLA | 2009 | US

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This paper first address the inelasticity of the price of gasoline and then describes the reasons for it. The paper discusses American consumers' high demand for gasoline being unaffected by changing gas prices due to the lack of available substitutes for gasoline. This does however change the consumers' demand for automobiles. This paper includes charts and graphs to illustrate the data propounded in the paper.

From the Paper:

"Gasoline's elasticity has and always will remain under 1.0. This just shows that no matter what the price of gas may be, consumers will still purchase gas. In 2007, gas prices were at a record high of almost $5/gallon in Los Angeles and yet, traffic was still awful. Why are people still driving cars and demanding gas when prices are so high? Being inelastic, there is no substitute for gas. What the increasing prices in gas do affect is the demand for cars. Consumers will find alternative ways for transportation such as carpooling, public transportation, walking, bicycling, etc. Even for those who do drive will get deterred from buying SUV's or high gas consuming cars. So with the lower demand for cars, car manufactures have had to change their production strategies. They have reacted by making cars that are gas efficient and more attractive for consumers to drive even with high gas prices."

Sample of Sources Used:

  • American Petroleum Institute: Major U.S. Pump Price Update - October 15, 2009. Copyright 2009. Retrieved October 19, 2009.
  • Baye, Michael R. Managerial Economics and Business Strategy, 6th Ed. Copyright 2009. McGraw-Hill/Irwin. Boston, MA.
  • Hughes E., Johnathan, Knittel R., Christopher, Sperling, Daniel: Evidence of a Shift in the Short-Run Price Elasticity of Gasoline Demand. Retrieved October 19, 2009
  • hybridCARS: April 2008 Dashboard: Hybrid Sales Defy Recession. May 13, 2008. Retrieved October 19, 2009.
  • Krantz, Matt: USA Today: Gas prices: It's supply and demand, and you wouldn't want the alternative - May 12, 2006. Retrieved October 19, 2009.

Cite this Cause and Effect Essay:

APA Format

Demand Function of Gasoline (2009, November 10) Retrieved May 30, 2023, from

MLA Format

"Demand Function of Gasoline" 10 November 2009. Web. 30 May. 2023. <>