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Oil Soars above $70 a Barrel�

This article was published in the Wall Street Journal on Wednesday, November 5th. The article was found in the “Money and Investments� section on page “C9�.

Summary of article

This article talks about the recent increase in the price of Oil futures by 10% due to a cut in production by the infamous cartel OPEC. It also sheds light on the prices of other commodity futures including Gold and Copper, however our concern here relates only to the prices of crude oil futures.

Economic theory in article

As we have learned in chapters seven and eight that products that are inelastic help generate increased revenues for its sellers, as the decrease in quantity is not matched with the far larger increase in price. OPEC took advantage of the inelastic demand of crude oil futures using this exact principle. Also, illustrated here is the lack of substitutability of crude oil futures due to their inelasticity.

As studied in chapter 8, a......

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Approximate Word Count: 307
Approximate Pages: 2 (250 words per double-spaced page)

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