econ-Journal12.doc

econ-Journal12.doc - transports and reducing their gas...

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Duc Hoang – Econ 210 Journal NyTimes: October 24, 2008, 3:19 pm Can OPEC Force Oil Prices Up? Once again, the inelastic goods producers play with the price game as they know they can control their profit as soon as their products are necessary. Oil is essential, thus the demand of using oil will remain no change when its price fluctuates. It is a fact that gas price keeps dropping everyday for several months. However, will the countries producing oil be successful to force the price up by cutting production? Looking back this summer when gas price climbed up to the peak at 4USD/gallon, Americans started using more public
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Unformatted text preview: transports and reducing their gas usage. Plenty of researches were implemented with the aim to search for alternate energy sources, and they have optimistic outcomes. This makes these oil producing countries struggle with the choice whether or not try to boost the oil price up as people will have an attempt to make gas less essential if it is too expensive. This reflects the connection between supply and demand: equilibrium price. When the good is more elastic, any attempt to increase the price might affect the quantity purchased as demand will decline....
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