Elasticity of the Demand Curve for Fuel

Many economists are convinced that fuel has a relatively inelastic demand curve, provide a discussion that substantiates their point of view. Do you agree with this view? Why or why not?

Many economists are convinced that fuel has a relatively inelastic demand curve. This discussion substantiates this point of view. Inelastic demand occurs when the quantity of goods demanded does not change proportionately as the change in their prices. For instance, when the price of a good with inelastic demand increases, the quantity demanded of the good does not change significantly like the change in price (Karlan et al, 2013). This makes the inelastic demand curve to become very steep because the price on the Y-axis changes significantly with little change on the quantity in the X-axis of the demand curve.

I agree that fuel exhibits this behaviour because no matter how the price of fuel changes, people will always purchase it because it is a necessity (Lin & Prince, 2013. People need to cook, to travel, and perform other activities that need energy and fuel in order to continue normally in life (Lecca et al, 2011). Therefore, when there is a shortage there will be a large increase in price of fuel but people will continue demanding it; showing an inelastic demand curve.


Karlan, D. S., Zinman, J., & National Bureau of Economic Research. (2013). Long-run price elasticities of demand for credit: Evidence from a countrywide field experiment in Mexico. Cambridge, Mass: National Bureau of Economic Research.

Lecca, P., Swales, J.K. & Turner, K. (2011). An investigation of issues relating to where energy should enter the production function. Economic Modeling, 28 (6), 2832-2841.

Lin, C.Y.C., & Prince, L. (2013). Gasoline price volatility and the elasticity of demand for gasoline. Energy Economics, 38(4), 111-117.

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