Microeconomic Research – Scenario C
Edgar is definitely an investor who also sees the high gas prices like a chance to generate money by American customers and their constant demand of gasoline, and soon a sizable demand from increasing car sales in India and China. Over the past several years the rise in crude oil price led to a drastic increase in gasoline prices setting record highs every summer. Buyers had to change their lifestyle, and knowledgeable investors saw this as an opportunity to join on producing a profit, and this is what Edgar plans to do with the two gasoline stations he wants to purchase. This investment can simply become a nightmare if the gas stations do not create enough earnings to cover expenses such as repaying the financial loans needed for your initial purchase, or increasing repair costs. Yet recently crude oil prices include plummeted and this new advancement can be a prelude to decreasing profits via gas stations. The analysis supplied below is going to discuss factors behind purchasing the gas stop as well as upcoming indications in what to expect regarding gasoline down the road. Demand Determinants
The price of crude oil which is refined into gasoline has a immediate effect on demand set by simply consumers. Even though the price does fluctuate as for any item, crude oil and gasoline can be special because it uses an inelastic demand curve. This is to state as the cost increases the variety demanded will probably be decreased, however, not by much as gasoline is important for many areas of a daily routine. Consumers as a result sacrifice different spending behaviors like eating at restaurants at a restaurant or traveling to a vacation spot by simply car or perhaps shopping most at one location rather than multiple locations. This can have a big impact on holiday destinations such as countrywide parks or perhaps beach cities during summer vacations, with an increase of people choosing closer and more local spots, or simply staying at home in a fresh term known as " Staycation” (Staycation Description, 2015)....
References: Biery, Meters. E. (2014). Why Gas Station Owners May Be Smiling. Forbes. http://www.forbes.com/sites/sageworks/2014/01/21/profit-margins-at-gasoline-stations-have-increased/
Glenn, R., Anthony Patrick. (2012). Economics, next Edition.
Barnes, J. Electronic., Knittel, C. R., & Sperling, Deb. (2008). Proof of a Switch in the Short-Run Price Suppleness of Gasoline Demand. Energy Journal, 29(1), 113-134.
How much tax do we pay on the gallon of gasoline and diesel gas? U. S. Energy Information Administration. January 20, 2015. http://www.eia.gov/tools/faqs/faq.cfm?id=10&t=10
New Gilbarco Encore three hundred with Grayscale CRIND. Paul & Associates. 2013. http://www.paulandassoc.com/products/gilbarco-encore300/
Petroleum & Additional Liquids
Polách, J., & Virglerová, Z .. (2011). OLIVE OIL PRICES AND ITS PARTICULAR DEPENDENCE ON OIL RESERVES. Scientific Papers With the University Of Pardubice. Series D, Faculty Of Economics & Government, 16(22), 155-164.
SLADE, Elizabeth. (2012). THE KEYSTONE CANAL ADDITION: ASSESSING THE POTENTIAL GREAT THINGS ABOUT REDUCED FUEL PRICES AND INCREASED COUNTRYWIDE SECURITY. Creighton Law Review, 46(1), 27-60.
Staycation Classification. Investopedia. http://www.investopedia.com/terms/s/staycation.asp Retrieved January 22, 2015.
Tesla Motors. Tesla. 2015 http://my.teslamotors.com/goelectric#range Recovered January 22, 2015