Sep 23rd 2012, 4:52:03
Oil is elastic as I've explained in previous posts.
"When a price change has no effect on the supply and demand of a good or service, it is considered perfectly inelastic." I have reasoned 2 replies ago, given many reasons, that oil price affects demand, though it may not affect supply (it can affect supply, people who stock oil may choose to dump oil).
Furthermore, the elasticity of oil is dependent on whether I buy the oil for tomorrow's grabs today, or buying it tomorrow. If oil is cheap today, I buy it today. If it's expensive today, I buy it tomorrow. That demonstrates elasticity, because when price goes up, demand goes down, and vice versa.
That fact that the same amount of oil got sold is irrelevant and doesn't prove inelasticity, I wasn't willing to pay the higher price if I could _potentially_ buy it at a lower price, and I was willing to take the _risk_ for it. [Edit: The demand changed to be higher today, but lower tomorrow because oil is cheaper today but predicted to be higher tomorrow - if this isn't proving elasticity, what does it prove?]
$350 was because it was the daily's peak price then, and the last 24 hours of oil was only at $250, (i.e eestats said the price was ranging from 200-350), so I could afford to wait a couple of hours for 200-250 oil to reach the market, and I didn't expect the price to stay at $350.
You have to study the market trends.
"When a price change has no effect on the supply and demand of a good or service, it is considered perfectly inelastic." I have reasoned 2 replies ago, given many reasons, that oil price affects demand, though it may not affect supply (it can affect supply, people who stock oil may choose to dump oil).
Furthermore, the elasticity of oil is dependent on whether I buy the oil for tomorrow's grabs today, or buying it tomorrow. If oil is cheap today, I buy it today. If it's expensive today, I buy it tomorrow. That demonstrates elasticity, because when price goes up, demand goes down, and vice versa.
That fact that the same amount of oil got sold is irrelevant and doesn't prove inelasticity, I wasn't willing to pay the higher price if I could _potentially_ buy it at a lower price, and I was willing to take the _risk_ for it. [Edit: The demand changed to be higher today, but lower tomorrow because oil is cheaper today but predicted to be higher tomorrow - if this isn't proving elasticity, what does it prove?]
$350 was because it was the daily's peak price then, and the last 24 hours of oil was only at $250, (i.e eestats said the price was ranging from 200-350), so I could afford to wait a couple of hours for 200-250 oil to reach the market, and I didn't expect the price to stay at $350.
You have to study the market trends.