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Elasticity in demand and supply

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How does Oil Prices in Year 2009 affect Demand and Supply of consumers and suppliers?

When Oil prices rises, does the demand and supply curve move? If they do, which direction did they move?

Based on your analysis, why does a demand curve shift in demand when oil prices increase in 2009? And how does it affect the supply of oil in 2009?

Based on your own opinion, what other factors are influencing the change in supply for Oil prices in 2009?

Is there any Elasticity in demand and supply? Please explain.

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Elasticity in demand and supply is evaluated.

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How does Oil Prices in Year 2009 affect Demand and Supply of consumers and suppliers?

Answer: Oil price is directly correlated with the inflation. An increase in the oil price has increased the inflation rate globally in year 2009. Due to this the cost of supply increased for the suppliers and hence the price. For consumers increase in the price of goods and services negatively affected the demand.

When Oil prices rises, does the demand and supply curve move? If they do, ...

Solution provided by:
Jayant Kumar, MBA
Education
  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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