If this trend continues, what kinds of things will you do in order to cut back on the money you spend weekly on gas? Do you think that people will change their lifestyles to save money?
The
increase we have seen in gas prices already is astonishing. Yesterday when I went
for a walk in the morning I saw the price of gas to be $3.99/gallon and when I
walked by the same gas station just 3 hours later it had already gone up to
$4.02/gallon! As Rebecca stated in her post, gas has an inelastic demand for it
since people need to purchase it no matter what happens to the price. I do feel
however that even though the demand for gas is inelastic, people will try to
cut back on consuming it by carpooling and taking other means of
transportation. Recently I took the Amtrak train to Burlington, VT from Brattleboro,
VT and the price of a ticket each way was only $12 making the roundtrip to be
$24. When I drove to Burlington from Keene about a month ago I spent about $50
in gas total. Taking the train is clearly much cheaper than driving a car and I
will now try to take the train whenever I can in order to cut back on the money
I would be spending on gas. I definitely think other people will start trying
to change the way they go about their daily lives in order to conserve gas.
What is
another major product you can think of with an inelastic demand? If the price
of this item increases do you think consumers will find ways to conserve their
overall use of the product?
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