Friday, 15 June 2012

Demand curves slope downwards ...

even for petrol. From Stuff we learn
Kiwis' quality of life is being hit by the high cost of fuel, a new survey shows.

Financial research and ratings agency Canstar Blue's monthly survey of 2,500 New Zealand consumers revealed nearly 70 per cent are being affected by high fuel prices.

More than half now say they only use their cars for essential trips, and over two-thirds use fuel discount vouchers to save money.
So what can we take form this? The price of petrol goes up and the quantity demanded goes down. This is exactly what we would expect. This is how price conserve resources. A price increases give people an increase to use less, i.e. demand curves slope downward.

The other thing we are told is that people use discount vouchers to save money. Seriously, this is news?!! Must be a very slow news day.

No comments: