http://abcnews.go.com/Business/fuel-efficient-cars-steady-oil-demand-rich-countries/story?id=8822971
This article mentions that the demand for oil in developed countries has increase to the maximum point. Many residences have their own vehicle because the standard of living is set quite high. Developed countries such as the United States are maintaining a steady demand of oil, whereas developing countries such as China have an expanding demand for oil. The reason is because the United States have reached its greatest possible amount of vehicle ownership. People assume that there will be a less demand of oil over time. The prices of oil are expensive and it will lead to a decrease in the demand for oil. Now the United States are aiming to achieve the creation of a more fuel efficient vehicle.
This article is directly related to the concept of demand. In this article, there is a steady demand for oil and is assumed to decrease. When the prices of oil rise, the quantity demanded will decrease while the quantity supplied will increase. A factor that will affect the demand would be the substitute products because prices of gasoline may be difficult to afford as the price increases. The demand for electric motored vehicles would increase because electricity is cheaper than gasoline. There would also be an affect on the demand for cars because when gasoline prices increases, the demand for cars would decrease. The preference of gas fueled cars over electric cars also affects the demand. Gas fueled cars can travel for longer distances and that makes it superior to the electric cars.
In our community, we are reliant on fueled vehicles for transportation. Gasoline is such an important factor in our life because cars are efficient and can transport us at a fast pace. The demand for gasoline is inelastic. The demand for gas is high even though the prices are rising. People are still consistently buying gas regardless of its price. Since the demand of gas is so high and there isn’t another efficient source of fuel to use for cars, it would be difficult to decrease the prices of gas. Constructing better fuel efficient cars would be a good idea because that would save some money with less fuel consumption.
