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How Gasoline Prices Affect Business Expansion

687 Words3 Pages

The ultimate goal for any business for profit (small, medium, or large) is financial growth. This desire is no different for a delivery service. When management entertain and deliberate on expanding, the team encounter many facets during the decision-making process. Therefore, it is extremely crucial for expansion, management understand which and all tools to employ to complete their main objective(s). There are many tools that are required to assist management in their decision-making process. However, this delivery service will review and evaluate the following tools to determine how gasoline prices will affect the business expansion:
• Aggregated supply and demand
• Standard deviation
• Elasticity of supply and demand
After carefully reviewing and analyzing the above mentioned tools, management can make a substantiate decision about expanding it delivery service.
Gasoline Prices Since the early part of the millennium gasoline prices in the United States reached an all-time national high of $4.11 per gallon in 2008, AAA …show more content…

Dwight go on to state, the supply curve (upward slope) is based on the surveillance that the higher the price the manufacture will produce more.
Gasoline is a direct operating expense for a delivery service, hence, understanding the supply and demand curve (as stated previously) is crucial to the decision-making process. The delivery service management compiled an analysis of 10 gas station prices within the local area (College Park, GA) and a surrounding area (East Point, GA). Through this analysis, management was able to ascertain whether or not it is feasible to expand to East Point, GA or not. Management was also able to compare and determine the elasticity of supply and demand on the gasoline prices for both geographic areas.
Elasticity of Supply and Demand for

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