Gas Pipeline in Usa
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Due to America’s strong desire to get behind the wheel of an automobile; a situation like the one occurring in Arizona in 2003 could definitely have some adverse effects on the market equilibrium. The prices of fuel and the limited supply of oil have created dissatisfaction for oil companies among Americans for many years. Not only do rising gas prices affect the habits of drivers, but they raise the price of many goods Americans use on a daily basis. The reasoning behind this is that companies now have to pay more money to transport goods, which in turn causes an inflation of many products consumed in America.
Potentially, this situation could cause changes not only with the supply curve, but with the demand curve as well. The supply curve is affected as gas becomes scarce in Arizona. This is expected in such conditions where supply cannot meet demand. However, this situation also causes a panic among drivers because gas is such a major commodity and needed in order to operate automobiles. The very thought of not having fuel has the ability to put people into a frenzy, which in turn causes peoples shopping and spending patterns to fluctuate. This is responsible for the demand change.
As the gasoline reserve dwindles, the supply curve will veer extremely to the left. This will be illustrated as the selling price of gas rises within a short period of time. On the other hand, the demand curve will be forced to the right because of the high demand for gasoline, despite the rising costs. This is a rare occurrence that happens on occasion with commodities such as gasoline, whose demand is so high that drivers are willing to pay a great deal of money.
According to the “law of supply and demand”, what should of happen is demand should fall because of the limited supply causing higher prices at the gas pump. In this case, supply and demand did not balance out because there is no alternative to gasoline. It is used in almost all aspects of transportation, with the exception of electric automobiles and bicycles. Not only is gasoline crucial for the transportation industry, but fuel is used in agriculture, amusement, and let’s not forget the psychological role that fuel fulfills. Freedom. A word that is associated with driving a car and being free to roam the open road.
Media plays a crucial role in the behavior of the public. The demand curve could have remained unaffected if the event was not referred to as a shortage in gasoline, in turn preventing the prices of gas to rise as much as they did. By panicking and buying up a lot of the fuel left