Is Petrol Elastic or Inelastic?

In this essay, I get out be discussing whether the engage for accelerator is Elastic or Inelastic, analysing whether it has substitutes and the factors that may affect its demand or supply. To a substantial extent, Petrol is Inelastic as it isnt influenced by many an(prenominal) other factors. The demand is impairment nonresilient as you need petrol regardless of price, and supply is similar price inelastic. In a hypothetical situation, if the price of Petrol was to summation in comparison to its normal price, the amount demanded does non flow meaningfully with price, this is because infrastructure is dependent on petrol, and because there isnt any other strong substitute to petrol, we cant easily switch to another fuel source without significant development in infrastructure.
For example, when petroleum prices rise people hack the amount they drive but they can rarely elapse it.
However, if you are a car owner you dont really mind who you buy petrol from. Esso petrol is not really any different to petrol from Tesco. Therefore, consumers are tenuous to changes in prices for an individual petrol station.




If there are many petrol displace close by the petrol companies will find that there demand is elastic. Increasing price could come before to a loss of market share.
However, if you are the only petrol station in a rural area or if you are a petrol station on a motorway, you have a lot more market origin. A motorist is not going to exit the motorway notwithstanding to avoid paying motorway prices. Therefore, in these locations the petrol stations have more market power, consumers less choice, demand inelastic; and this is why petrol is more expensive.
Maybe it means that the high the market share the lower the PED. the less market power a petrol station has the more elastic demand isIf you want to get a full essay, order it on our website: Ordercustompaper.com



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