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Essay heading: The Impact Of Rising Oil Prices On The South African Economy In Relation To The Demand And Supply Of New Motor Vehicles
Essay specific features
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Business |
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| Date added: |
March 5, 2006 |
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5 / 1151 |
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0 times |
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Essay content:
Oil price is very price inelastic.
Fig 1. Source: WTRG Economics (2007)
The oil supply demand relationship has, to an extent fuelled or influenced, the oil price hikes however this cannot be established as a fixed indicator of the rising oil price trend.
Fig 2. Source: WTRG Economics (2007)
However when looking at the cross price elasticity of demand of motor vehicles in relation to Oil, we see a highly elastic environment...
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Source: WTRG Economics (2007)
However when looking at the cross price elasticity of demand of motor vehicles in relation to Oil, we see a highly elastic environment.
Fig 3. Source: NAAMSA(2008)
The comparison of the two graphs(fig 2 and fig 3) show that the surge in oil prices, although not influencing demand for oil, has had a downward push on the demand for new vehicles especially since late 2006 going into 2007, which has seen a marked increase in oil prices...
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