Heating Commodities Essay -- essays research papers

Heating Commodities keister in the middle of October, the price of natural-gas had risenbecause a gas society was forced to shut down a pipeline due to the deprivation forrepairs. This impending shortage led to the decrease in prices for opposite high temperature commodities, as well as larger profits. The beseech for energy was nice greater and greater because it was that time of year when consumersbegan storing energy in their homes to fixate for the cold winter months ahead.The four commodities mentioned in this article, crude oil, heating oil, flatulence and natural gas are all substitutes for one another. This is truebecause the muff elasticity of admit states that as the percentage change inthe measuring rod demanded of one commodity results from a one percent change in theprice of another commodity. In other words, the increase in demand for crudeoil, gasoline, and heating oil was the outcome of the price increase in naturalgas.As shown in the graph below, the cross e lasticity of demand is direct(positive). As the price of natural increases, the quantity demanded for thethree other energy commodities increase.The market system today functions on price. Consumers make their finish on what to buy by the price of their desired good. Naturally,consumers will study the lower price of a commodity they wish to purchase.This is why consu...