Price Elasticity Of Demand Of Petrol
The price of petrol at the pumps has risen substantially over the past few years. In the UK, according to here, the average price between January and June 2011 was 133.13p. The consumption of petrol and diesel are given in the following table.
The price of petrol at the pumps has risen substantially over the past few years. In the UK, according to here, the average price between January and June 2011 was 133.13p. The consumption of petrol and diesel are given in the following table.
UK consumption of petrol
and diesel (tonnes millions)
2006
|
2007
|
2008
|
2009
|
2010
|
|
Petrol
|
18.14
|
17.59
|
16.68
|
15.76
|
14.99
|
Diesel
|
20.15
|
21.07
|
20.61
|
20.06
|
20.87
|
Total
|
38.29
|
38.66
|
37.29
|
35.82
|
35.86
|
Articles
Cash-strapped drivers cut petrol use by 15 per cent Channel 4 News (5/10/11)
Cash-strapped drivers cut petrol use by 15 per cent Channel 4 News (5/10/11)
WHAT IS
THE FACTORS THAT CAUSED THE CONSUMPTION OF PETROL AND DIESEL DECLINE?
In my opinion, the reason why the consumption of petrol and
diesel drop :
-is the rising of the price of petrol and diesel. If the price
of the petrol and diesel is fallen, I think the quantity demanded of the price
and diesel will increase.
-In the theory of price elasticity of demand, petrol is grouped
into elastic demand. It is because, many people cannot afford the high price of
petrol, hence they are not willing to drive car so the demand of petrol will
decrease.
-The level of income is also one of the factors that caused the
petrol and diesel decline. When people has lower level of income, people are
much more sensitive to the price of petrol compared to the people who has high
level of income.
-Furthermore, if people think that petrol is in high price, they might want to take LRT or MRT. LRT and MRT is save cost and will not cause environment pollution.
Post by Pang Ru Yee
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