Not sure I completely agree. You seem to be assuming rational behaviour on the part of consumers, whereas we often buy goods and services on the basis of irrational choices (cigarette, anyone?). The result of this is inelastic demand for goods and services to which people have some sort of emotional attachment or addiction - that is, if gas prices go up by 1000%, consumption may only drop 10%. The big increase in gas prices in the UK in the 1990s caused protests - but gas consumption and miles driven by car drivers continued to increase. Indeed, the trend in the UK is now towards
large and inefficient 4 wheel drive vehicles.