Transcription de Should the Government Regulate Gas Prices ?Should the Government Regulate Gas Prices ?There has been a raging debate over the ever growing price of gasoline. In our car dominant society gasoline is an indispensable need that affects the ability of millions of americans to get to their jobs. The price of this good greatly influences the productive ability of a community; and that is precisely the reason why it should be treated with a laissez-faire approach. The Effects of RegulationLook at the graphWhat If the Government Interfered Again ?It the government set a price bellow the equilibrium, it would cause a shortage of gasoline. This would have intense consequences for everyone. It might make small oil business go bankrupt, and it might force the authorities to ration gasoline once again. It is set the price above the equilibrium price, it would create a surplus of the product since consumers would buy less. This would make business increase even more their prices to try and compensate for their losses. What Can We DoThe best solution the the problem is not to ask the government to regulate the prices of gasoline, it is instead to try to increase internal production of oil, so that we depend less on an unstable OPEC and relay on our own productive capabilities instead. We should also try to move away from using gas since it is a non-renewable resource and try to switch to a more sustainable power source. There is a simple economic explanation that is responsible for the undesirable raise in gasoline prices, supply and demand. The supply of oil of the majority of the world comes from the OPEC. during the past few years it was able to sustain the worlds need for oil, however as political problems compromised its ability to maintain its output, the shortage in supply caused an increase in global prices.
Should the Government Regulate the Price of Gas?
If the government decided to act it would not be the first time that it regulated the price of gasoline. During the 1970 after the OPEC embargo of the U.S the price of gasoline rocketed to an incredible 12 Dollars per Gallon! The Government then quickly placed a ceiling on the price of gasoline. This however resulted in an incredible shortage for everyone, the situation got so bad that it eventually had to ration the amount of gas, assigning specific days you could gas depending on the type of vehicle you owned.
Why Does The Price Increase ?
Effect On Us
The effect of the gas regulation on us is very direct. It will cause unemployment for many people working in the gas industry since the companies will try to cut costs to compensate for their losses. It will also cause if the regulated price is put beneath the equilibrium point.
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