Supply and Demand and Price Elasticity
- Submitted by: rclark4u
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- Category: Politics: Economics
- Date Submitted: 06/30/2010 02:42 PM
- Pages: 5
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Supply and Demand and Price Elasticity
With numerous commodities used daily, Crude oil is a hard commodity well-known in the worldwide economy. Many aspects contribute to the shifts in the supply and demand of crude oil. Along with those factors, the price per quantity demanded is found to be in accordance with the product market equilibrium. Many researches are in progress to identify alternatives to reduce the dependency of crude oil products, but crude oil remains to staple in the marketing systems.
Crude oil, like all commodities, is subject to shifts in supply and demand from time to time and many factors contribute to this shift. Crude oil prices are determined by worldwide supply and demand. Demand can vary worldwide with the economy and with weather. Supply can be influenced by the Organization of Petroleum Exporting Countries (OPEC) and other factors (U.S. Energy Information Administration, 2008).
The demand for gasoline will be higher in summer months because people drive more during the popular vacation season. Damage to oil supply channels will cause a short-term shift in the supply of oil, such as pipeline ruptures, fires, and hurricanes in the gulf coast that cause damage to oil platforms and refinery stations. Labor strikes and terrorists threats at refineries can also cause a shift in the supply of oil. The rise of emerging markets is changing the supply and demand dynamics. For example, as China and India industrialize, and their emergent middle classes buy cars, then the demand for gasoline rises (The Oil Drum, 2007). The global recession is contributing to a less demand for gasoline because people who cannot afford to pay the high price of gasoline are finding alternate means of transportation. These consumers will take the city bus, car pool, or ride bicycles to and from work. Some communities are promoting these alterative transportation modes by installing bicycle lanes on their city streets and car pool stations. The automobile...
With numerous commodities used daily, Crude oil is a hard commodity well-known in the worldwide economy. Many aspects contribute to the shifts in the supply and demand of crude oil. Along with those factors, the price per quantity demanded is found to be in accordance with the product market equilibrium. Many researches are in progress to identify alternatives to reduce the dependency of crude oil products, but crude oil remains to staple in the marketing systems.
Crude oil, like all commodities, is subject to shifts in supply and demand from time to time and many factors contribute to this shift. Crude oil prices are determined by worldwide supply and demand. Demand can vary worldwide with the economy and with weather. Supply can be influenced by the Organization of Petroleum Exporting Countries (OPEC) and other factors (U.S. Energy Information Administration, 2008).
The demand for gasoline will be higher in summer months because people drive more during the popular vacation season. Damage to oil supply channels will cause a short-term shift in the supply of oil, such as pipeline ruptures, fires, and hurricanes in the gulf coast that cause damage to oil platforms and refinery stations. Labor strikes and terrorists threats at refineries can also cause a shift in the supply of oil. The rise of emerging markets is changing the supply and demand dynamics. For example, as China and India industrialize, and their emergent middle classes buy cars, then the demand for gasoline rises (The Oil Drum, 2007). The global recession is contributing to a less demand for gasoline because people who cannot afford to pay the high price of gasoline are finding alternate means of transportation. These consumers will take the city bus, car pool, or ride bicycles to and from work. Some communities are promoting these alterative transportation modes by installing bicycle lanes on their city streets and car pool stations. The automobile...