Newsflash! Demand Curve Slopes Down!!
USA Today's front page headline today really isn't that far from mine: "Cutting back at the pump: Gas use drops as prices rise". But USA Today writer James Healey's economic insight doesn't stop there... It looks like the supply curve slopes up!
Fuel conservation might be short-lived. For one thing, prices are likely to drop. EIA says, "Significant increases in gasoline production ... over the next several weeks should stem the rise in gasoline prices and may, actually, cause them to decline somewhat."
Let me be clear that I'm not complaining. Would that we regularly had headlines proclaiming economic truths. In fact, let me suggest some:
- Prices move to match supply and demand!
- Rent control causes housing shortage!
- Regulatory paperwork burden favors large, established firms!
- Minimum wage disemploys least skilled!
- Federal Reserve causes inflation!