I am curious as to the effect of the world wide web on the elasticity of everyday items. Specifically the lack of elasticity of gasoline prompted this thought being that we all have to use gasoline. Before the internet we would have been limited to getting our fuel at the most convenient location to our home or work. There are now various websites that will update a consumer with the gas prices from various gas stations so it is possible to plan a route that will pass a station with lower prices. The necessity for this has dropped recently with the lowering of prices but if we are headed back to over $3 per gallon in the future then how is this going to effect the elasticity of gasoline.
The internet effect can be examined further by looking at a variety of industries including travel, we no longer have to rely on a local travel agent when we can be our own on hundreds of websites. Shopping for a car has moved from the dealership around the corner to a search including dealerships within a 200 mile radius. The addition of that amount of inventory must have an effect on the prices that are paid for these items, which I would hypothesize will change the elasticity of the items as well.
Monday, January 25, 2010
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment