Why is gas is the price it is today How does the price of ga

Why is gas is the price it is, today How does the price of gas get lower in the market? What could cause the price of gas to rise?

Solution

The price of gas depends on the relative demand and supply of gas in the market. The price is determined by the equilibrium point at which the demand and the supply curve intersect.

The price of gas gets lower when the quantity demanded goes below the equilibrium demand given that the quantity supplied is fixed or the quantity supplied goes above the equilibrium level given that there is no change in quantity demanded.

The price of gas gets higher when the quantity demanded goes above the equilibrium demand given that the quantity supplied is fixed or the quantity supplied falls below the equilibrium level given that there is no change in quantity demanded.