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In a competitive market prices of products are not regulated by government intervention in any form; instead the market forces of demand and supply are allowed to determine the price of any product. For any product if the number of buyers increases there is an increase in demand; if the supply remains constant this results in an increase in the price. On the other hand for a constant demand if the quantity of the product supplied increases there is a drop in the price of the product. As the demand and supply of a product is also dependent on its price, the equilibrium price is one where the supply of the product is equal to its demand.
If the oil production in the Middle East were to decline due to a crisis, it would result in a drop in supply. If the demand for gasoline were to remain the same, this would increase the price of gasoline.
If people were to take more vacations and travel to their destination by car it would increase the demand for gasoline and, the supply remaining the same, the result would be an increase in the price of gasoline.
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