...the price of gasoline is due to suppliers gouging and controlling prices. It seems that every trip to the gas pump is a life changing decision. Should I buy gas, or should I buy fewer groceries for the house? Most of us, however; will not sacrifice our gasoline. This is due to the fact that in the short run most of us are less demand sensitive to price changes than in the long run (Gotheil, 2005). On the other hand, if we are given enough time, and prices steady increase, we may begin to look into alternatives to driving. For example; drivers may opt for using public transportation or buy more fuel efficient vehicles. The demand for gasoline tends to be price inelastic. In an article written by, Tom Lehman, titled “Gas Prices Fact or Fiction: A Primer on Supply and Demand”, the author argues: One of the leading and most widespread theories about gasoline markets is that prices are controlled entirely by oligopolists and monopolists in the oil and gasoline industry, and that suppliers may charge whatever high price they prefer with impunity due to collusion and cartel agreements (Lehman, 2005). This argument may be valid to consumer, because of witnessing gasoline prices rising among gas stations simultaneously. Fluctuating prices of gasoline at the pump are not solely due to wholesalers and refiners controlling the market. Gas prices fluctuate due to supply and demand. Consumer demand for petrol tends to be less sensitive to price changes. Thus, gasoline is considered...
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...Everyone’s gasoline problem The price of gasoline has varied widely from a current low of $3.98 a gallon to a high of $4.21 approximately ten weeks ago. In order to appreciate the reason for this fluctuation it is important to understand that the price of gas, like other commodities, is determined by the relationship of supply and demand. Since gasoline is a relatively inelastic product, the price alone does not have much bearing on the demand. Rather, other non-price determinants such as personal income and product availability play a bigger role in the demand for gas. The recent drop in prices has been largely attributed to a weakening of global demand; particularly the slowdown in Europe’s manufacturing industry. The unemployment rate in seventeen countries that use the euro has increased over the past few months and the United States has added fewer than expected jobs to the economy. These factors have led to a reduction in personal income thereby reducing the overall demand for gasoline. On the supply side of the equation, price increases earlier in the year were caused by supply interruptions in South Sudan, Syria, Yemen and the North Sea. This reduction in supply coupled with the tightening of sanctions in Iran reduced the number of petroleum sellers in the market causing a price hike at the pump. Consumer expectations of further supply interruptions led to the sustained higher prices. Being an inelastic product (few substitutes available), the actual retail...
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...Everyone’s Gasoline Problem: Gas prices break down and vary on a daily basis primarily in direct relationship to the price of crude oil. 77% of the price of gas at the pumps is reflective to the price of crude oil. 12% is taxes and the other 12% is distribution and marketing. *(US 1) The following 2 charts show this direct relationship. *Chart Midwest Regular Conventional Retail Gasoline Prices Data from http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EMM_EPMRU_PTE_R20_DPG&f=W The price of crude oil internationally can be summed up best by the following chart: In summary the price at the pump we pay is directly related to the price of crude ole and as most of our oil supply is not generated domestically our prices vary according to international pressures and demands. Chapter 3, Question 14 Before Starbucks: Equilibrium QD = QS After Starbucks introduces premium blend: After the hard freeze in coffee beans: After the hard freeze the worlds premium coffee supply would experience a temporary shortage that for the would drive prices up until the supply can be increased. Chapter 3, Question 15 After the deep freeze on the orange crop: After the deep freeze the US’s Orange supply would experience a temporary shortage that for the would drive prices up until the supply can be increased. After Bush calls for an increase in ethanol production and the impact to the US corn crop: The demand would increase and...
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...Queena.Jenkins@yahoo.com Everyone’s Gasoline Problem Supply and demand is a major factor causing price fluctuation at the pump. The law of demand states all else being equal, as price falls, the quantity demanded rises, and as the price rises, the quantity demanded falls. This is an inverse relationship. If this statement was true concerning fuel then the consumer demand for fuel would decrease as the price increases. Obviously it is not. Supply must also be taken into account. The law of supply states that as prices rise, the quantity supplied rises, as price falls the quantity supplied falls. This is a positive relationship. Concerning fuel prices if demand rises or a disruption of supply occurs; pressure will be placed on the price. The inverse is also true, if a surplus exists or demand falls less pressure will be put on the price. Competition between retailers could cause prices to fluctuate. If competition does not exist and the retailer is the only player for miles the price may be higher. Oil, gold, wheat and other products are traded on a world market. The price of oil has risen because of its demand around the world. According to Gross (2010), The unrest and war in Iraq and other oil producing countries has also driven prices to an all time high of 101.5 per barrel. The determinate of change in resource price has shifted the supply curve to the left. The increase in the price of oil reduces the supply of gasoline. Gasoline prices in Georgia have risen by 21 cents...
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...Tracee Finley Business Economics GM 545 Spring Semester 2012 Tfinley73@yahoo.com Everyone’s Gasoline Problem Since September 2010, average monthly gas prices have risen 45 cents to $3.21 (February month-to-date), an increase of 16.4%. But during the past four years, there have been several periods where gas prices increased by even more substantial amounts. In 2008, gas prices rose 94 cents — or 33.4% — to $4.11 between February 2008 and June 2008. Gas prices also increased 63 cents from February to May 2006, 86 cents from February to May 2007, and 94 cents from December 2008 to June 2009. (http://www.edmunds.com/about/press/current-gas-price-hikes-dont-measure-up-to-recent-history-says-edmundscom.html). Prices fluctuate at the pump because of problems in the Middle East, natural disasters and government regulation. Crude oil also plays an important role in gas prices. Crude oil is a natural substance found underground that is used to produce fuel for cars, trucks, airplanes, boats and trains. As of February 2012, crude oil prices made up 72% of the price of gasoline. (http://useconomy.about.com). For every $1 increase in the price of a barrel of crude oil, U.S. consumers are likely to pay 2-1/2 more cents for a gallon of gasoline. The prices that we pay at the pump are determined by supply and demand. For example, if demand rises and supply falls, prices increase, and just the opposite when supply increases and demand decreases, prices will decrease. Being an...
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...Everyone’s Gasoline Problem When it comes to issues in fluctuation in gasoline prices, supply and demand play a huge role. When prices fall, quantity demand will rise, when prices rises, quantity demand will fall. In most situations these are true statements, and it would seem that the demand for fuel would decrease when prices for fuel increase. Because fuel is a large necessity, this isn’t always the case. In the past few years oil prices have risen to an all-time high. The change in resource price has caused the supply curve to shift to the left. The increase in the price of oil, have reduced the supply of gasoline. Recently, especially in town’s similar Seattle where I live, People have begun to find alternatives to using gasoline. The current gas prices in Seattle are up to $3.88 per gallon, and this is just for regular. In the past month alone, gas has jumped from $3.76 per gallon, to $3.88 per gallon. Prices fluctuate for a variety of economic reasons, one of the main being supply and demand. The price of gasoline is determined by supply and demand. When the there is a decrease in supply, demand rises, and prices will increase. When consumers noticed the increase in price, they began looking for alternative solutions in transportation in order to save money, which have caused gas prices to slowly decrease. When the demand is less, the price may still decrease even when there is a lack in supply. In conclusion, last summer when gasoline was priced at over $4.00 per...
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...on pearl farms South sea bubble A surfeit of farmers and shortage of buyers tarnishes a once lustrous business Mar 11th 2010 | SINGAPORE | From The Economist print edition [pic] Hard times on pearl farms South sea bubble A surfeit of farmers and shortage of buyers tarnishes a once lustrous business Mar 11th 2010 | SINGAPORE | From The Economist print edition [pic] YOU can hear the relief in Rosario Autore’s voice when he talks about how his firm, Autore Pearls, one of the world’s largest pearl suppliers, survived the past 18 months. “Within the pearling industry we had a tough time,” he says. A slump in sales thanks to the global economic downturn and unexpected currency movements played a part. But the main problem underpinning the industry’s woes is a supply glut. Andy Muller, a dealer based in Japan, estimates that the worldwide production of cultured “South-Sea” pearls (from South-East Asia, Australia and the Pacific) increased from 2.4 tonnes in 1998 to 12.5 tonnes last year. The increase was due chiefly to the rapid expansion of pearl-farming in Indonesia, the Philippines, and, to a lesser extent, Myanmar. This has dimmed South-Sea pearls’ glow: the value of the harvest at the farm gate fell from $220m to $172m over the same period. “At present, the cake served to overfed and cash-strapped consumers is too large to be digested,” Mr Muller says. That leaves many pearl farms selling their wares below cost. In the Indonesian province of West...
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...C A S E S T U D Y I N F O R M AT I O N S H E E T humansynergistics.com Best Practice Case Study: Improving Leadership Performance at GE Financial interview with dr. linda sharkey by richard sharp Dr. Sharkey is currently Executive Director of Executive Networks, Inc. and author of Optimizing Talent: What Every Leader and Manager Needs to Know to Sustain the Ultimate Workforce Linda Sharkey understands leadership. As Executive Director of Executive Networks, Inc.—an organization that connects key HR heads from the largest corporations in the world—she provides members with new ideas, advice, practical materials and “early warnings” on key trends and innovations. She is also Strategic Partner with the Vaya Group (formerly Corporate Insights), where she plays an integral role in their talent practice, and a founding member of the Marshall Goldsmith Group. Her past includes serving as V.P. of People Development at Hewlett-Packard, where she was responsible for establishing and driving the company’s talent management initiative, including a groundbreaking assessment process, which enabled the company to see the behaviors it most valued and culture it supported. But what Sharkey is best known for is the work she did with leaders at GE—championing a process that was described by CEO and business icon Jack Welch as a “best practice in leadership development.” At the core of that work are the surveys and inventories that Sharkey used while doing research for her dissertation—specifically...
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...Ethanol: Is It Really the Best Option Ethanol based gasoline vehicles are becoming more and more popular, but is ethanol gasoline better than regular petroleum gasoline? Ethanol, also known as ethyl alcohol, can be an effective motor fuel, and most of the gasoline in the US contains some ethanol (Ethanol As a Transportation Fuel). Many people everywhere are praising ethanol gasoline because it can reduce pollution, and increase engine performance. There are some facts that are not being recognized, and these facts should be brought to light. The price of corn and food products made from corn will increase from the higher demand of corn and vehicles have to use one-third more ethanol than regular gas. Ethanol gas in the end will end up costing more than petroleum gas being used now. Ethanol gas as an alternative to gas will mean that the demand for corn will become greater and greater. The use of ethanol in motor fuel has increased for years an average of twenty-five percent per year (Ethanol Cost And Environmental Factors). This year America will use 5 billion bushels of corn which will produce about 14 billion gallons of ethanol (Helman). So will farmers be able to grow the amount of corn needed for the production of ethanol gasoline and food demand? The increase in corn crops in the Midwest has added to size of the dead zone in the Gulf Coast (Miller). What if the country was to experience another serious drought, or major flood? A different method of creating ethanol would...
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...dependency. Case in point; the hybrid car is one which typically uses more than one source of power. Hybrids use an electrical motor to run the car and a gasoline engine to charge the batteries which power the electrical motor. The gasoline engine is also used to give the car extra power when needed. Hybrids get about twice the mileage of regular gas driven cars. Whereas the average gas fueled car gets about 20 mpg, the hybrid gets about 40mpg. Experts predict that hybrids could make up 30 to 35 percent of America auto market by 2015. However, if every body in America went out today and traded their regular gas driven cars in for hybrids, we could cut America’s foreign oil dependency in half. Another alternative to America’s dependency to foreign oil is Ethanol Fuel. The problem with this is, us as Americans need to demand it. We can’t set back and wait for the government to make it available for us years down the line. We must demand it now. Ethanol is a liquid fuel made from vegetable type sources instead of from oil. Sources for ethanol include corn, wheat, barley, trees and grasses. Ethanol is less polluting than gasoline because ethanol is created from renewable resources. Ethanol is most commonly mixed with regular gasoline and many vehicles are made to run on a fuel mixture known as E85 fuel which is 85% ethanol and 15% gasoline. Wider use of ethanol would greatly reduce our dependency on foreign oil....
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...environmental/geographic, and political/legal/government segments to understand the general environment facing Great Lakes. Describe how Great Lakes will be affected by each of these external factors. Social/demographic: Great Lakes started as a successful, low-key corporation. With the acquisition of Octel, they stumbled on a gold mine. They had the ability to create more bromine but also but them as owner of a lead additive called tetraethyl lead (TEL). Socially, this has made them an enemy. TEL has caused the death and disablement of many. Society is not looking at Great Lakes as a hero. They are looking at them as a problem that needs to be dealt with. The terminated use of TEL would make them more favorable here in the U.S. as well as in other developed and developing countries. As they venture into more un-chartered territory to expand the use of lead gasoline, more lives will be put at risk. Mortality and disability rates will increase. Technological: Great Lakes does not have any technological issues. They have the capability to remove the lead additives and to stop producing them as well. Their products were sold not only in the US and other developed countries but developing countries as well. Some developing countries did not have the capacity or know how to make the change from lead to unleaded gas which meant Great Lakes could still make a profit off of lead additives. It would be in their power to help those developing countries with the necessary technology...
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...2008) Such a disruption occurred after Hurricane Katrina hit the Gulf of Mexico and surrounding areas, where a number of refineries are located. The further you are from the gulf area, the more likely you are to find yourself paying more at the pump. It is a common occurrence to be driving down the road and to see that gas prices vary significantly from station to station. Competition between gas stations is a source of price variance. Some stations are even sending employees to scout the competition each day. (Davis, 2007) As oil production ramps up and summer driving season ramps down, prices is already beginning to drop. Average gas prices dropped to around $2.62 a gallon this week after reaching $3.04 last month. As consumer pumps gasoline at a gas station in...
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...1992 introduced AFV’s into the US market, where they were mainly used by government agencies. The common term used to describe AFV vehicles is light duty vehicle (LDV). In addition, federal fleets are required to use dual-fuel vehicles unless a waiver is granted. Because of high oil consumption in the US transportation sector, concerns about national energy usage began to rise. This raised many questions regarding the resulting environmental impacts of greenhouse gas emissions. An example of this was in 2008, when it was estimated that the transportation sector emitted 1,930 million metric tons of carbon dioxide, which represents a 33.2 per cent share of total carbon dioxide emission from all sectors. However, using AFV’s also caused problems, such as not having enough stock of vehicles, an increase of oil price costs and fuel demand. These higher oil prices had a direct impact on the development and penetration of AFV’s in all markets. (According to Jacob, Welch, and Simms2009) Advantages to Adding Alternative Fuel Vehicles One advantage to using AFV’s is their comparative economic...
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...Filoil believes that the Filipinos can fight poverty by engaging in entrepreneurship as its competitive edge for growth and success. Long Term Goals Filoil is dedicated to uplift the Filipino entrepreneurial spirit as the catalyst for sustainable success and profitable business operation. Objectives * To profit * Sell about 2500-4000 liters a day * Build customer loyalty through good service and clean products * Increase sales by 10% annually * To offer the lowest possible price in the gasoline market Organizational Chart C. Product Category Review General description * Premium Gasoline “Flash Gas”- 93 Octane reading with engine cleaning additives * Unleaded Gasoline “Speedy Max”- 93 Octane Rating Lead-Free * Regular Gasoline- 83 Octane Rating * Biodiesel Fuel * Lubricants Sale Trends Gasoline is a necessity and it should be available at anytime of the day. Gasoline is one of the factors why the society goes on and the market prices rises. Gasoline makes everything faster than the way it is. People usually gas up before a price hike for them to save cash. Distribution Profile Filoil caters to both private and public cars. Filoil- Gonazaga caters to mostly the establishments near the location, from class A, B, and C. Pricing Overview In the petroleum industry, pricing depends on the economy. Filoil tries...
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...price of oil has been the most significant factor relating to the increase in the price of gasoline. The high price of oil is a simple case of supply and demand. The supply of oil has not increased in proportion with the increase in demand. Demand for oil has increased worldwide as countries like China and India, as well as other developing countries, are dramatically increasing their demand for oil. This demand, coupled with investors who are seeking to invest in commodities such as oil due to the weak dollar, are driving oil prices up. The cost of gasoline is not solely based on the price of oil. The price of gasoline also includes the taxes, the cost to refine oil into gasoline, the transportation costs, and the profit of the gasoline dealer. Stocks of gasoline grew by almost one million barrels which means there will be plentry of gasoline available. The weaker demand of gasoline, combined with plentiful gasoline supplies, could eventually lead to lower prices at the pump. In April, gasoline demand was down and this has made for one of the weakest summer driving seasons in years. A survey commissioned by Discover Financial Services found that 62% of respondents are changing their holiday plans because of the higher gas prices, while 15% canceled vacations. However, declining gasoline consumption in the U.S. has done little to deflate gasoline prices at the pump so far. The problem is that demand for other fuels, namely diesel, continues to be strong. This is helping to...
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