To: Les Singer; Secretary, DOE From: Policy Group Office of Secretary Les Singer Subject: Answers for the reporters I know that there a many questions being asked in regards to gasoline prices and comments made by J.R. We as the policy group are doing the best that we can to work on answering all of your questions and coming up with explanations to make sure that you fully understand. The answer to your question on why price ceilings will prevent the laws of supply and demand from operating is actually quite simple, but before answering it you must understand what a price ceiling is. A price ceiling is the maximum amount of money a company can charge for a product. Now by understanding price ceilings we can understand the effect of supply and demand, if demand increases but supply does not, then typically the price would increase, but there is a law stating if the price can not increase then this adjustment can not happen. This also causes problems with shortages which can become a fear with little gas around. With there being such a high demand for gas and supply being low it can cause a shortage. …show more content…
When looking at the different categorizes given to us, it was clear that by prioritizing people who drive public transportation, then this would at least give everyone a chance to get to and from where they needed to go. At the same time we also want to give people who need it and can afford the access to it. Now it’s hard to find a way to get everyone who needs gas, access to gas so some decisions need to be made. That being said we need to give gas to the people with the larger priority for it, which in this case is those who can provide transportation for now until we are able to come to a conclusion about how we are going to handle the lack of