On the day we checked the price was 5125 a barrel if

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Unformatted text preview: il, such as Nymex Crude. On the day we checked, the price was $51.25 a barrel. If you want to check the future price of oil, go to www.emcp.net/oil_futures or simply click on “Commodity Futures” in the left margin of your first screen (the screen that shows the current price of crude oil). On the day we checked, the (expected) future price of crude oil was $51.35. Notice that the difference between the current price ($51.25) and the future price ($51.35) is only 10 cents, which means that oil producers don’t have much incentive (if any at all) to shift oil from current supply to future supply. 120 Chapter 5 Supply Ricky is thinking of selling his house. He just heard that the price of houses is expected to rise three months from today. Instead of offering to sell his house today, he waits until three months later. Why did he wait? Ricky believed the future price of a house would be higher than the current price of a house. Notice that we are talking about a nonperishable good here (houses). In other words, waiting a few months, or even a year, to sell a house doesn’t lead to a...
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