Gm545 Project 1

In: Business and Management

Submitted By lilymouse13
Words 956
Pages 4
Business Economics GM545
Summer 2012

Gas prices vary widely from state to state based largely on local taxes. But prices have been trending higher nationwide after an increase in the price of crude oil, the main ingredient in gasoline, especially in California. Californians pay, on average, 70 cents more than other parts of the country for gas. The average cost per gallon in California is currently $4.23, while the national average cost per gallon is $3.75. A big factor that is affecting gasoline prices are our economic issues. Our current economic status plays a part because people are more cautious of their money during economic hardships than when the economy is doing well. While people will still buy gas others will hesitate in taking less or no road trips.
Competition on the local market affects gas prices greatly. In heavily populated areas and cities, gas prices are more likely to be lower as there are more gas stations available. However in more rural areas, station owners are able to set the gas prices a bit higher as customers have no choice but to use the gas in those areas.
Seasonal changes also have an impact in gas price fluctuations. Gas tends to go up in California, especially in the Bay Area, during the summer months usually due to family traveling and driving distance vacations. We are at the end of summer so we are seeing a decrease in gas prices, until the next season jumps in affect with increased gas prices. During holiday and summer time, many people tend to travel more frequently than they usually do to the increasing the demand for gasoline, this in turn increases the price of gas. Being summer vacations or holiday shopping and visiting family, as the demand for gas increases, suppliers increase prices to help balance off the market. Right when we get a break on gas prices, end of summer before the holiday raise, the Bay Area’s gas…...

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