Business economics Essay Example | Topics and Well Written Essays - 1000 words

occupancy economics - test ExampleThe largest consumers of fossil fuels be the automobile industry and the electric originator generation industry. Major manufacturers of the reality likewise rely mostly on bunker fuels to run their factories. What peak fossil anoint means is that crude production is now on a downward slope due to declining oil colour production from speedy depletion of this non-re red-hotable energy source. Oil is also an energy that has security risks involved as its source, chiefly in the midway East, has been wracked by production disruptions lately. Economic development for the past several decades has been anchored on the assumption of tuppeny oil supplies but this is not true anymore. Fossil fuels or hydrocarbons have supplied the most of energy requirements for transportation and also for the production of fertilizers, plastics, fibers, pesticides, detergents and even pharmaceuticals (Abdullah, 200518). It is quite ironic the automobile industry i s only when now again bring around electric cars although the technology had been around since the invention of cars centuries ago but shelved due to the availability of vast cheap oil which precluded further development of electric and hybrid cars (Anderson, 20104). Market Structure the oil industry is an oligopoly. ... To date, the only large areas still left unexplored are the large patch of ocean in the southwestward China Sea known as the Spratly Islands group (Deffeyes, 20019) and the cold Arctic wastes of the North Pole (Myers, 20111). The orbicular warming from climate change had made the ice glaciers retreat which now opened many new inaccessible areas to possible oil and gas exploration activities. Price Discrimination the oil industry had been aerated in the past of this bad practice as it has a complete hold on oil production and sale. There is latent bell collusion among the oil manufacturers in which one leading producer can increase its prices at will and then followed by the other producers (OPEC is an example although its pricing power has weaned recently). Other practices include setting the maximum price that the market can bear as producers in oligopolies are price-takers (ability to set the price) especially with oil becoming a diminishing commodity. Industry players are able to do this because of price inelasticity in oil demand in some markets. Government Regulations the oil industry also stands accused of price gouging in which the players take advantage of price volatility in the international markets to their own advantage. Although many factors determine the gasoline price at the pump, it has been estimated only 85% of price changes are due to changes in demand conditions worldwide. This is further complicated by growing demand from sinewy powerful economies like China and India. In the United States, Robinson-Patman Act (1936) makes price discrimination an illegal practice. It is rarely enforced due to the difficulties in monitoring volatility and the many factors driving gas prices. Global Business Environment the industrialized