Critique "Gas and Supply and Demand"

I believe that Melissa's chosen article is incredibly relevant in interesting. While it's such a simple and a constant issue, she makes good points through out it when describing the issues of supply and demand within the industry. Gas is a necessary part of our every day life and affects absolutely everyone, including those in the class. Due to this, her stipulations about the issues regarding supply and demand when discussing gas are accurate. Due to the necessary and constantly increasing amount of demand that there is for gas the lesser supply, one can interpret this by saying that everyone will still continue to buy gas no matter what the price. There is no way for them to continue living their every day lives without this. Every object in the classroom is there because it was flown, shipped or driven by something that runs on gas. Since gas is also a natural resource there will a constant supply for the most part. Despite this, the demand has been increasing due to international problems. Some of these international problems are natural disasters, such as the earthquakes in Japan. This intertwined issue can be seen through a supply and demand curve. No matter what the price of gas is, the consumers will continue to pay despite this because of the constant high demand.

Melissa also states that as price increases, the consumption seems to also increase. She made a good observation when she noticed that this doesn’t follow the rules of price elasticity. Since price elasticity states that if the price of a commodity rises the demand will then fall. She claims that this loophole in the rule can be blamed on the rising consumption levels of Asian countries based on the fact that America’s demand hasn’t risen as such sharp levels. I believe that she made a good point when she blames supply as the determining price factor because there is no clear or current substitute for gas. Due to this, it makes gas inelastic since it becomes less than one. All of these are valid and necessary points to the argument that she is making.  When she discusses how if the price increase would create a decrease in demand for oil in Europe, the U.S. and China would help the price to go back down and the supply and demand to reach equilibrium, I wish that she had discussed some more of the consequences. Especially since there is a possibility that the price will continue to remain at such a high rate. I would also have liked to hear how she would interpret that within price equilibriums.