In basic economics class, students learn different meanings for words they already know, like “demand” and “elasticity.” As an economic term, elasticity is the degree to which demand for a product is affected by a change in price. For example, the demand for luxury items is often elastic. If the price of a Caribbean cruise doubled, fewer people would opt for that vacation. On the other hand, the demand for salt is inelastic.
If the price of salt doubled, or even tripled, consumers would likely buy the same amount. Part of the reason for that is that the price is so low to start with, and the other reason is that most people consider it to be a necessity.
The demand for gasoline is typically considered inelastic, and history confirms it. We have seen the price of gasoline double, and most people still have to get where they are going, so they buy the same amount of gas and just complain about it more. As with salt, most people consider their gasoline usage to be a necessity. Although American drivers are reluctant to admit it, our gasoline prices are relatively low. Europeans pay much more for their liter of gas.
Although the demand for gasoline itself is inelastic, the demand for a road trip is quite elastic. Last time we endured a spike in gas prices, many opted for a “staycation” rather than paying such high prices during their off time. Conversely, falling gasoline prices have many Floridians dreaming of their next road trip as spring and summer approach. Since it is much less expensive than last year or the year before, perhaps you should consider a weekend getaway or spring break road trip. According to Edmunds.com, sixty percent of us said we would take a road trip in 2015 if gas prices continued their steady decline. Residents of Brevard County are no exception. 2016’s current gas prices give residents the opportunity to hit the road for less, and we have many exciting destinations just an hour or two away from home.
Of course you will need to be sure your vehicle is ready for the weekend. If you need a checkup before your next road trip, bring your car to our automotive repair facility. We are a family-owned shop, well equipped to perform major repairs or provide routine maintenance on your car. We have been serving Brevard County since 1966.