Answer to Question #80201 in Microeconomics for Diamond

Question

What factors lead to high pump gas prices these days from Demand perspectives? Apply ALL of TIPEN Demand Determinants and include the source pages in your textbook.

Answer 1

In this case an increase in demand may cause pump prices to increase.
Increase in demand occurs due to the following reasons:
(i) The fashion for a goods increases or people’s tastes and preferences become more favourable for the good;
(ii) Consumer’s income increases.
(iii) Prices of the substitutes of the goods in question have risen.
(iv) Prices of complementary goods have fallen.
(v) Propensity to consume of the people has increased and
(vi) Owing to the increase in population and as a result of expansion in market, the number of consumers of the goods has increased.
Source:
https://www.yourarticlelibrary.com/economics/demand/reasons-for-increase-and-decrease-in-demand-explained-with-diagram/38960