Example Of Price Elasticity Of Supply For Crude Oil For Past Five Years Essay

The supply in the market of a specific product responds to changes in the corresponding price changes in the industry (Binnie and Skeggs, 49). The formula for price elasticity of supply compares the percentage change in the supply of the product due to recent changes in the price (He, 14). However, the figure of price elasticity is denoted by Es, and it moves from 0 to 100, the minimum figure represents the condition when there is no response in terms of present supply (Iceland, 256) against a considerable amount of change in the supply, and the maximum one in this regard notes that the price and supply changed on equal basis. In practicalized circumstances, the price impacts supply more than the minimum limit and less than the maximum one. Following is the table showing demand and supply figures of crude oil in the US.
Based on the above table, one can infer that the changes in supply are causing considerable amount of pressure on the price of crude oil in the US local market (Pagel, 33). However, the supply side is facing a hard time with the need to keep up with the changes in price because the field of oil extraction and processing is a technical area of expertise (Paul, 16), and therefore, the changes in prices are having significant effect on supply of the product. In recent years, the demand side is not powerfully responding to the changes in price because demand is supposedly remaining steady due to shifting focus of the market towards alternative energy sources.

Works Cited

Binnie, Jon and Beverley Skeggs. "Cosmopolitan knowledge and the production and consumption of sexualized space: Manchester's gay village." The Sociological Review 52.1 (2004): 39–61 online.
He, Yinen. "History, Chinese Nationalism and the Emerging Sino–Japanese Conflict." Journal of Contemporary China 16.50 (2007): 1-24 online.
Iceland, John. "Beyond Black and White: Metropolitan residential segregation in multi-ethnic America." Social Science Research Vol 33(2) (2004): 248–271 online.
Pagel, Mark. "War of Words." Annual Editions: Anthropology Thirty-Eighth Edition (2014): 33-35 online.
Paul, John. On Human Work : Laborem Exercens. New York: Pauline Books & Media, 1981 online.