Supply and Demand and Gasoline

Topics: Supply and demand, Petroleum, Gasoline Pages: 7 (2125 words) Published: August 20, 2012
1. Select two companies whose product(s) you use in your daily life. You may choose any firms you wish, as long as their information is publicly available (as to their products and financial information) and they are known to the average person. Dell computer & Lukoil

a. Dell computers cover needs pertaining to strategy and deployment, IT and business consulting, managed services and all around expert advice and world-class support. Dell products can be used within organizations to use business processes efficiently, and assist with technology infrastructure and applications services to pinpoint growth opportunities that essentially reduce costs.

b. Demand for the equipment that Dell produces is very high. The global computer industry is consistently transforming to meet the needs of business and personal activities and Dell is front and center with this. Globalization has helped innovation with respect to these advance changes. Improved technology makes it possible for business to interact more efficiently and ultimately boost revenues and keep down certain costs. If an organization does not have the proper technology to efficiently run their business, they will suffer. Computers aren’t limited to business or personal use anymore. Schools utilize laptop computers for students in the classroom, creating a very high demand for them. Libraries use them, and online education has become increasingly popular in today’s society.

c. The supply-and-demand model relies on a high degree of competition, meaning that there are enough buyers and sellers in the market for bidding to take place. There is significant competition for Dell in the market. Prime competitors include Hewlett-Packard, Apple, Samsung and IBM to name a few.

d. There are substitutes for Dell’s brand of computer technology and there are different levels of their own brand from high end to low end, depending on the consumer’s price point and needs.

e. Revisit this

f. The demand for the product is elastic. While many businesses rely on computer technology, it is also considered a luxury. For example, as computer systems becoming outdated and less efficient as newer models, consumers can choose to hold out on purchasing new ones if necessary. People can also work less efficiently if necessary, to avoid the cost of a computer.

g. Revisit this

a. Gasoline is primarily used as fuel within combustible engines (automobiles, airplanes, boats, lawnmowers etc) and it is produced in oil refineries. It consists mostly of organic compounds obtained by the distillation of petroleum, and then enhanced with several additives. Some gasoline also contains ethanol as an alternative fuel. There is a concern with gasoline on the environment. Aside from the complications of its extraction and refining, there is the potential effect on the climate. Un-burnt gasoline and evaporation from the tanks will react in sunlight to produce photochemical smog. Addition of ethanol increases the volatility of gasoline, potentially worsening the problem. Our society is very dependent on gasoline. We cannot transport goods or transport ourselves without it. Of course, they lived without fuel, airplanes, automobiles and trains in years passed – but globalization and our current way of life and economy has become dependent on it. The US accounts for about 44% of the world’s gasoline consumption. U.S. petroleum consumption reached an estimated 18.87 million barrels per day in 2011, and is expected to increase to 18.96 million barrels per day in 2012. On average, U.S. drivers consume 1.49 gallons of gasoline per day, or about 10.44 gallons per week. Western countries have among the highest usage rates per person.

b.Demand directly affects the price of gasoline. The marketplace forces of supply and demand determine the price of fuel. If demand grows or if a disruption in supply occurs, there will be upward pressure on prices. At the...
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