The price of gas went from $2.69/gal to $8.99/gal (at one station) in 12 hours. BUT
SO WHAT?
Scarcity increases price. Increasing price decreases demand thus reducing scarcity. Increasing supply lowers price.
Except for those whom it has priced out altogether.
Not just that-
The belief that scarcity exists will also increase price.
This I agree with.
$8.99 is a bit over the top, imho.
BTW, I am from North Dakota, If we want to see a hurricane here we either have to travel or watch TV.
Increasing price here will do little to decrease demand. There are no public transportation systems, and everything is pretty far apart. You still have to get to the places you have to get to.
To the extent that scarcity causes and imbalance or disequilibrium between supply and demand, you first statement is correct. The second statement, however, is incorrect. Demand does not change in response to a change in price. Quantity Demanded will change. (Demand is the relationship between price and quantity demanded, i.e. it is the whole line on the graph.) When price increases, quantity demanded decreases. But this does not affect scarcity. The only thing that will affect scarcity is a change in supply. This is why even after the price of oil dropped, and the wholesale price of gasoline dropped, the quantities available have not immediately increased, so the supply has not increased. And since demand has not changed, the retail prices of gas have not dropped back down in response to the reduction in input costs over the last day or so.