Question #80252
What factors lead to high pump gas prices these days from Supply perspectives? Apply ALL of PRESTN Supply Determinants and include the source pages in your textbook.
Expert's answer
High pump gas prices may be a result of decrease in supply on pump gas.
A decrease in supply can result from a change in any of the five supply determinants.
1) Resource Prices: An increase in resource prices.
2) Production Technology: A decrease in production technology.
3) Other Prices: An increase in the price of a substitute-in-production or a decrease in the price of a complement-in-production.
4) Sellers' Expectations: Expectations by sellers of an increase in the price in the future.
5) Number of Sellers: A decrease in the number of sellers in the market.
Source:
https://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=supply+decrease
A decrease in supply can result from a change in any of the five supply determinants.
1) Resource Prices: An increase in resource prices.
2) Production Technology: A decrease in production technology.
3) Other Prices: An increase in the price of a substitute-in-production or a decrease in the price of a complement-in-production.
4) Sellers' Expectations: Expectations by sellers of an increase in the price in the future.
5) Number of Sellers: A decrease in the number of sellers in the market.
Source:
https://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=supply+decrease
Learn more about our help with Assignments: Microeconomics
