Elasticity

"Why $100 per barrel of oil prices are bad for Alberta - and everywhere else"

Is a blog on the current oil prices per barrel in comparison to the price 10 years ago.  As the price of oil and gas rises the demand decreases and travellers and tourists find alternative methods of enjoying the great outdoors and travel methods.  Gone are the days families will plan more than one trip per summer to enjoy an outing with family and friends.  People are finding cheaper alternatives of travelling such as car pooling, public transportation, biking and simply walking.  More and more city dwellers are also choosing more cost efficient ways of entertaining themselves by remaining within the city limits and enjoying what the city has to offer.  This is good for the shops and venues within the city limits but bad for rural business where tourism is low.

Prices have increased dramatically within the last ten years rising from $20.00 per barren in 1990 to $100.00 per barren in 2010.  Therefore causing the demand for gas/fuel to become more and more inelastic.  There is no close substitute for gas/fuel and although the price rises people have no alternative but to purchase at the price given therefore forcing the consumer to choose alternative methods of saving money by changing their choice of transportation.  The time it takes to produce gas is lengthy and takes time this also adds to the factor of inelasticity because the longer the period of time it takes to produce the product the greater the elasticity.  Finally there is a large percentage of one's income spend on fuel to travel to and from work, school, shopping and for educational purposes resulting in a person spending a large percentage of their income of fuel.

Our oil and gas resources are non-renewable and as our oil and gas deplete we can expect the prices per barrel to continue to increase rather than to fall and ever be where it was 10 years ago.  We really need to consider new and improve methods of fueling our vehicles.

http://looking-for-balance.blogspot.com/2011/03/why-100-per-barrel-oil-prices-are-bad.html