Demand Connection, yo.

Out of all the topics we're able to write this entry about, I'm going to choose Inelastic Demand as my topic - specifically, gas prices, which is a topic I'm sure I'm not the only one writing about. Now that I've started driving and having to pay for more of my own gas, I'm realizing how very, very expensive it is. It costs about $40 to fill up the tank on my little blue car, and putting $10 in seems to vanish almost immediately. Gas, though, is something necessary to everyone, and no matter how expensive it may get people will still buy it.

These days, I'm always watching to see which gas stations may have a lower price - one I pass on the way to school has a gallon for about ten cents less than the station near my house. It's beneficial to get gas there if I'm nearby, but to drive out of my way to go there, I'm probably not saving much money. But even if people can get gas for a lower price at a different station, there's a high chance they'll get gas wherever is most convenient. Even if the price were to rise to ridiculous prices, people will still buy it because it's necessary for their every day schedule and transportation.

The reasons that gas count as an inelastic demand good are that even if the price fluctuates, people will still buy around the same amount - nor will they go out of their way to buy more or less. A cars gas tank can only fit so much, and so when gas prices get low, it isn't as if a person can stock up on gas while it's cheap; they're ruled by the size of their gas tank. Like another example of inelastic demand, milk, you can't stock up on it, can only get it when you need it. That is what makes gas an inelastic good.

As for a question to finish off this entry; if there were a way for people to stock up on gas (using sources outside of their gas tank) how would the price of gas change?