According to an article written by the CNN Staff, US gas prices have lately been going up excessively. The most recent survey conducted last Friday reveals the exact increase in prices; 5.3 cents more. As many people ponder the reason behind this dramatic increase in gasoline prices, this article clearly uncovers the answer. The reason retailers decided to raise their gasoline prices was simply because of the extreme price of ethanol. Since ethanol is primarily a source of gasoline, it's no wonder why the prices have had to go up.
The textbook, Working With Economics, provides a lot of insight in terms of analyzing the reason behind this gasoline incident. Since the rise in gasoline prices was not a factor of consumer behaviour, it must therefore be a supply concept. In consonance with the textbook, the increase in production costs (ethanol) led to the sudden increase in supply which resulted in increased prices and decreased quantity exchanged. As well, 'our demand remains very weak and our supply very strong' (paragraph 10) in the article also states the same thing.
Although paying up to $3.16 in the United States for gas is ridiculous, keep in mind that the companies are only trying to accommodate their prices with that of ethanol. Rather than judging the gasoline companies for their extreme prices and cringing at the thought of paying that much per litre, save the complaining for something else. As stated in the article, 'bad employment numbers and expectations' (paragraph 5) is only proof that we are all just trying to get by. Doesn't matter if it's surviving as a company or as a person. Additionally, I personally think that the increase of prices of gasoline because of the expensive ethanol will have an overall positive impact on our planet. If the demand of gasoline continues to drop, people will travel around no longer promoting global warming.
Lorena Laurencelle
