Electronic References
Home Register login Logout

Heating Commodities

TitleHeating Commodities
# of Words528
# of Pages (250 words per page double spaced)2.11

Heating Commodities




Heating Commodities


        Jennifer Loughery 082970
        Introductory to Micro-Economics 1011-107
        Dr. Pryor
        November 25, 1996.


     Back in the middle of October,  the price of natural-gas had risen
because a gas company was forced to shut down a pipeline due to the need for
repairs.  This impending shortage led to the decrease in prices for other
heating commodities, as well as larger profits.  The demand for energy was
becoming greater and greater because it was that time of year when consumers
began storing energy in their homes to prepare for the cold winter months ahead.
     The four commodities mentioned in this article, crude oil, heating oil,
gasoline and natural gas are all substitutes for one another.  This is true
because the cross elasticity of demand states that as the percentage change in
the quantity demanded of one commodity results from a one percent change in the
price of another commodity.   In other words, the increase in demand for crude
oil, gasoline, and heating oil was the outcome of the price increase in natural
gas.
     As shown in the graph below, the cross elasticity of demand is direct
(positive). As the price of natural increases, the quantity demanded for the
three other energy commodities increase.
     The market system today functions on price.  Consumers make their
decision on what to buy by the price of their desired good.  Naturally,
consumers will choose the lower price of a commodity they wish to purchase.
This is why consumers, wanting to heat their homes, chose to heat them with
natural-gas's substitutes (crude oil, heating oil, or gasoline) rather than the
natural-gas, the higher priced commodity...This is ONLY a preview of the article. If you would like to view the entire document, you must subscribe to Electronic References. Please register below now!

Get This Full Article After Registration

When you subscribe to Electronic References, you get complete access to the meta-collection of full text articles and papers written by researchers and students spanning the last 5 years. For $19.95 a month, you will receive unlimited access and the ability to expand your research opportunities and knowledge.

This subscription package includes:

  • 24-hours-a-day, 7 days a week unlimited access on any computer with Internet access
  • Complete access to all 60,000 articles, essays, and research papers
  • Ability to view, save, print and download any document you find
  • Ability to browse through perfectly arranged catalog of articles
  • Superior search and relevancy ranking techniques using our optimalized search engine
  • Instant access to the online database after registration
You can pay by credit card or checking account. You get instant access after registration:

1 Month ($ 19.95)
3 Months ($ 29.95)
6 Months ($ 39.95)

You will be billed $19.95 every 30 days or $29.95 every 90 days (recurring billing) starting on the day you subscribe.
Your credit card or checking account will automatically be renewed for your convenience until you cancel.


Home | Register | Login | Logout | Privacy Policy | Disclaimer | Help | FAQ | Contact Us | Cancel Subscription

Copyright 1998-2007 Electronic References. Electronic References is designed only to assist students and researchers in the preparation of their own work. Anybody who use our services are responsible not only for writing their own papers, but also for citing Electronic References as a source when doing so. By accessing and using this page you agree to the Disclaimer.