... ECONOMICS Contents Contents 2 Introduction 3 Problem of scar in respect to the oil 3
Externalities from oil consumption 10
Control by the Government 11
Just like any other valuable commodity, oil is subject to the economic laws of demand and supply. According to the demand law, if the price of a product increases, it has an inverse relationship with that commoditys demand, in that, it reduces, and vice versa. The global demand and supply of oil have made it a unique product. Oil experiences derived demand1. In this respect, its demand refers to the quantity that buyers will desire to buy at various prices. On the other hand, the supply of oil denotes the quant...