Essay on price rise of petrol in india - …
In the first place, rise in petrol price contributes to using more public transportation by individuals. However, the truth is that wasting much time waiting and travelling between bus stops in the long run makes a difference. Undeniably, petrol performs an imperative role in people’s life which increasing the price paves the way for getting the price of food and service tremendously high because it determines any product’s price. All in all it will serves as the personal burden for people. These lead us to conclusion that traffic congestion problem could be improved efficiently with other reasonable ways.
05/06/2015 · Why Did The Petrol Prices Increase Again
The above events will also affect the market for petrol which is related to private cars. Private cars and petrol are complements and hence the increase in the demand for private cars will lead to an increase in the demand for petrol. The cross elasticity of demand for a good with respect to another good is a measure of the degree of responsiveness of the demand for the first good to a change in the price of the second good, ceteris paribus. Since the cross elasticity of demand for private cars and petrol is negative, the rise in the price of private cars due to the decrease in the supply will lead to a decrease in the demand for petrol. Given that the quantity of private cars is likely to rise, the demand for petrol is likely to rise. If this happens, the price and the quantity will rise. The supply of petrol is price inelastic as the supply of oil is price inelastic due to the long production time as a result of the long construction time of oil rigs, assuming no or little excess capacity in oil production. Therefore, the price is likely to rise by a larger proportion than the quantity. When oil prices rise, the cost of production of petrol will rise which will decrease the supply. When this happens, the price will rise and the quantity will fall. The demand for petrol is likely to be price inelastic due to the high degree of necessity and lack of close substitutes. Therefore, the price is likely to rise by a larger proportion than the fall in the quantity. The increase in the demand and the decrease in the supply will both lead to a rise in the price. Although the increase in the demand will lead to a rise in the quantity, the decrease in the supply will lead to a fall in the quantity. Due to the inelastic supply, the increase in the demand is likely to lead to a small increase in the quantity, and due to the inelastic demand, the decrease in the supply is likely to lead to a small decrease in the quantity. Therefore, the effect on the quantity will depend to a large extent on the relative changes in the demand and the supply. As the increase in oil prices is likely to be small given that they have only started rising, the decrease in the supply is likely to be small. Therefore, the increase in the demand is likely to be greater than the decrease in the supply and hence the quantity is likely to rise.
The nature of demand for petrol in the short run the tax will be an effective source of revenue, but in the long run it is predicted that people adjust the consumption of petrol, this will take time, people will consume less as prices increase over time....
Essay On Price Rise Of Petrol In India - …
Over the last two decays, with respect to the issue of tackling traffic congestion, a series of attitudes have been put forward. Some are on the view that increasing the price of petrol is the best approach to untie the traffic congestion whilst others subscribe to the idea that there are other possible solutions. I personally concede that the idea put forth by the second group is more logical. In the following paragraphs, I will elaborate on my reasons for this perspective.
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In this situation, FPC contended that if the natural gas producer and pipeline companies are unaffiliated, the gas well head prices will be competitive due to the market forces....
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