Gas price and the market. Title of the article: Pain at the pump: Gas prices top $4 a gallon across Bay Area
This is the second part of my paper, and the first part of my paper is attached and it is the summary, so please use my idea of the first part of my paper, and add something based on the requirement of the second part of the paper. You only need to refer to one article, and the whole paper is based on this article "Pain at the pump: Gas prices top $4 a gallon across Bay Area"
https://www(dot)mercurynews(dot)com/2019/09/30/pain-at-the-pump-gas-prices-top-4-a-gallon-across-bay-area/
In the second part, you will use the model of supply and demand to analyze the event described in the first part. This part must describe in detail how the event affects the market using the concepts and terms introduced in class.
For example, if you are analyzing a shift in a demand curve due to change in the price of a substitute, you must describe
the direction of the shift in the demand curve,
the initial shortage or surplus experienced by the market,
how changes in the price move the market to a new equilibrium, and
the change in equilibrium quantity and price from the old equilibrium to the new equilibrium.
The analysis of the event must involve one of the following economic concepts:
Shifts in the supply curve
Shifts in the demand curve
Price controls (price floors and price ceilings)
Taxation
This second part of the exercise must contain at least five complete sentences.
Title of the article: Pain at the pump: Gas prices top $4 a gallon across Bay Area
Name of the media source: The Mercury News
Gas Price and the Market
Student’s Name
Institutional Affiliation
Gas Price and the Market
Instead of gasoline prices in the Bay Area to decrease like in other parts of the country, they are increasing steadily. Currently, a gallon costs $4. Other parts that are affected include San Francisco with a price of $4.14, Oakland with $4.03, and San Jose with $4.01 per gallon. However, the national price stands at $2.65 per gallon (Crum, 2019). The following is the model of demand and supply, which illustrates the situation at Bay Area:
Diagram 1: Demand and supply curve
As shown in diagram 1, the normal price of the gasoline per gallon is at the equilibrium point where the demand curve intersects with the supply curve. Nevertheless, after the shift in the supply curve, the following diagram shows why the price has increased:
Diagram 2: Shift in the supply curve
As indicated by Rex Crum in the article, there exist two primary conditions that have contr...
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