Unformatted text preview: 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 price inelastic. In otherwords, when prices change, consumers’ buying habits change proportionately less than the accompanying change in price (Lehman, 2005)....
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- Spring '11
- Supply And Demand, Internal combustion engine, Gasoline, Filling station, Fuel dispenser