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Complete 4 page APA formatted essay: Gas Prices and the Law of Supply and Demand.The fluctuation of oil supply is largely credited to the increasing demands of an increasing world population (Campoy a
Complete 4 page APA formatted essay: Gas Prices and the Law of Supply and Demand.
The fluctuation of oil supply is largely credited to the increasing demands of an increasing world population (Campoy and Russel, 2009). Furthermore, our oil mineral deposits are slowly being depleted. oil minerals are not something which can be manufactured or replaced once used. The next best thing for oil companies and prospectors to do would be to look for new sources of oil. However, this is only a temporary remedy to the oil shortage issue. If alternative sources of energy and fuel would not be found, the prices for oil would continue to rise and the supply for oil would continue to decrease. The price of gas as ruled by the law of supply and demand must be controlled and managed. The consumers have recognized the fact that they would not be able to afford the rising oil prices if they do not conserve their fuel consumption (Campoy and Russel, 2009). In this regard, consumers opted to cut back on their driving and save their fuel consumption for essential use only. As a result, gasoline was able to regain its supply gap and consequently push up the depressed oil prices (Campoy and Russel, 2009). Since the price of oil is very much dependent on the law of supply and demand, there is an element of managerial strategy which will always hover over the determination of oil prices. Such strategy may sometimes be attributed to the practice of hoarding or controlling the amount of oil released to the market. To some degree, this practice has been speculated by various analysts and scholars as the cause of oil price increase with oil companies seeking to gain the most profit from oil (Fessler, 2009).