The Resource And Product Market Of Natural Gas Production Essay

1043 Words Nov 10th, 2014 null Page
In order to fully understand the significant fluctuations in the resource and product market of natural gas, we must first know what a resource market and product market is and its effect on natural gas production. My understanding of a product market is where the goods and services produced by businesses are sold to consumers and resource market consist of the labor and resources that goes into producing these things are marketed. The utility firm in essence is the relationship of the product market and resource in regards to supply and demand of a good. In the body of the essay below, I will examine price elasticity, principle agent problem, and whether the nature of my local market is monopolistically competitive, oligopolistic, or a monopoly market.
We as consumers (the principal) face a number of problems in life reference services provided by others (the agent). Those problems include entrusting individuals and companies, OPEC, for example who market, study and research crude oil to formally help we the consumers make informed decisions about when and where we will purchase gas. Why is that? We (principal) have very limited knowledge of oil production, price per gallon, and other factors that determine whether prices will escalate or decline. OPEC may not set prices but it plays a part in setting production limits meaning that they interfere with standard supply and demand market forces so cause the price of oil to rise by limiting the supply. On the other side…

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