Tuesday, July 1, 2008

Demand Curves Slope Downward

According to the U.S. Energy Information Administration, oil consumption dropped in April to a level not seen since 2002. The idea that people consume less of something when its price increases is not a revolutionary idea. Yet some people just have a hard time accepting it. When prices increase, consumers alter their behavior: driving less, planning fewer trips to run errands or using other modes of transportation. They even buy more fuel efficient cars.

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