Monday, May 6, 2019
Gas Pipeline Essay Example | Topics and Well Written Essays - 1000 words
Gas Pipeline - Essay ExampleThe superpower of suppliers to cater gas welcome been drastically reduced resulted in a shift in the supply curve to the left as can be seen on graph 2 below. This resulted in the correspondence point moving left from E1 to a new point E2 on the graph on the production point of the supply and submit curves .Another fact that can be derived from the above graph is that a small shift in the supply of gas will result in a big shift in price. The reason for this is that gas is not a luxury but a indispensable product for most people and businesses, and this is indicated on the graph by a much steeper pick up curve than normal, meaning the demand curve for gas is less elastic. Even so a sum up in price will result in a marginal decrease in demand as people restrict driving for essential reasons only, such as going to work to asseverate gas. It would not constitute resulted in a shift of the demand curve as there was nought really forcing a increase or decrease in the demand for gas, except the increase in price.Additionally the drop in gas supply and the resulting increase in price would also have effected many other market contributors. The distribution of products onto the market is done by a trance system, and a large part of this system is fueled by gas, such as trucks and delivery vans. The suppliers of these products would have paid more to be able to distribute their products to shops and malls, so the price of these commodities would have also done for(p) up, negatively influencing their demand.The above can be seen as the behavior of a open market influenced by buyers and sellers naturally driving the market towards a equilibrium. When prices are above the equilibrium point and there is a surplus of goods, it will cause market prices to fall (Mankiw, Gregory, 2004). In the above case study we had a price below the equilibrium point as there was a decrease in supply, causation market prices to rise.Cited Page1. Pump scathe Graphs. ArizonaGasPrices.com. 2003 - 2006. Accessed 29 March 2006.www.ArizonaGasPrices.com/retail_price_chart.aspx2. Arizona Gas Prices. Gas Price Comparisons. Accessed 29 March 2006http//www.arizonagasprices.com/3. Mankiw, Gregory. Principles of Economics.