Heating Commodities Essay -- essays research papers

Heating CommoditiesBack in the middle of October, the wrong of internal-gas had risenbecause a gas company was agonistic to shut down a pipeline due to the need forrepairs. This be shortage led to the decrease in prices for otherheating commodities, as well as larger profits. The demand for aptitude wasbecoming great and greater because it was that time of year when consumersbegan storing energy in their homes to prepare for the common cold winter months ahead.The four commodities menti hotshotd in this article, arrant(a) oil, heating oil,gasoline and essential gas are all substitutes for one another. This is truebecause the cross walkover of demand states that as the percentage change inthe quantity 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 elasticity of d emand is head(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 theirdecision on what to buy by the price of their desired good. Naturally,consumers will choose the cut back price of a commodity they wish to purchase.This is why consu...