65 615
Assignments Done
99,2%
Successfully Done
In October 2018

Answer to Question #69012 in Other Economics for Joshua Ng

Question #69012
Suppose war broke out in the Middle East and gasoline and diesel fuel prices began rising. Jeepney drivers and bus owners feared future oil shortages if war cut off the flow of oil, and they rushed to fill up their fuel tanks. In this case, as the price fuel increased, jeepney drivers and bus owners bought more, not less. Is this an exception to the law of demand? Use the terminology of the demand and supply model to explain your answer.
Expert's answer
Described rise in fuel demand was short-term.
However, as pre-purchased fuel will be consumed soon, drivers will need to buy other portions. And in this case, according to dependences between demand and supply, petrol sales are expected to decline.
Therefore, primary rise in fuel sales with a rising price can be explained as an exception to the law of demand.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be first!

Leave a comment

Ask Your question

Submit
Privacy policy Terms and Conditions