Eco 561 Week 2 Business Economics Paper

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Business Economics Gasoline is a primary use for automobiles and trucks but is also used farm equipment, and recreational vehicles (1). Large amounts are purchased by consumers every day and the fluctuation of gasoline has been a trend. There are many determining factors contributing to fluctuating prices of gasoline. The first factor is the cost of crude oil in conjunction with the cost of refining, third is seasonal demand, and the fourth factor is due to world occurrences and/or natural disasters. Crude oil is the single biggest factor in the fluctuation of gasoline (1). The cost of crude oil is substantial in which it produces gasoline. Prices are determined by the worldwide supply and demand (1). The higher the demand, the higher the price. The supply of gasoline is high which will increase the price. The supply can be reduced due to the refinery production problems. This will cause wholesalers to bid higher for available supply and charge consumers a higher price for gasoline. In 2008, ocean tankers transported about 67% of imported crude oil process by U.S refineries (1). The distance from the supply can affect the price because the farther it is sold from the source, the more it will…show more content…
Due to the competition of the new mobile phones, new flat screen TV’s, and other electronics, the demand responses to computer chips are high. The higher demand in technology, the more computer chips are needed. More than half of its total operating income in the quarter was based on the profits from chips and will most likely extend through the third quarter; increasing profit from the chip division (4). A manufacture of the computer chips might increase the price of the chips for the suppliers which will raise the price of the product for the consumers. Another way is to sell the chips separately similar to batteries. Batteries for most toys and electronics are sold
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