Management Economics Report: Analysis of Oil Price Determinants

This report provides a descriptive analysis of changes in oil prices over time, highlighting the effects of higher oil prices on fiscal deficits, the rupee, and current account deficits. It identifies factors influencing demand, such as price, income, and the price of related goods, as well as supply-side factors affecting the oil market. The report discusses the impact of abrupt oil price increases and plausible economic factors, such as per capita income. The conclusion emphasizes that changes in crude oil prices significantly influence demand, underscoring the importance of these variations for consumers and stakeholders in the crude oil market. Desklib provides similar solved assignments and past papers for students.

MANAGEMENT ECONOMICS- 2

Introduction
With the changing time the prices of oil has
also been considered very important as the are
rising day by day and in this respective report
there is the descriptive analysis of change in
oil prices over different phases of time. The
price of crude oil is generally called the spot
price of barrel and the price of oil is identified
by the international demand instead of any
country's domestic productivity stage.

Effects of higher oil prices
• Higher prices have adverse effect on fiscal
deficit
• Impact on rupee
• Impact on current account deficit:

Factors which are responsible for the change in demand
• Price
• Income
• Price of related goods

Factors that affect the supply
Oil is the most valuable commodity, used in
everything from plastics to asphalt to fuel.
The oil business is a major economic force,
and governments, corporations, investors, and
traders all keep a close eye on changes in oil
prices.

Observed change in price
A abrupt increase in the price of oil,
frequently coupled by a reduction in supply, is
known as an oil crisis. Because oil is the
primary source of energy for industrialized
industrial economies.

Plausible factors
It may be argued that the economic aspect of
it is relatively simple. A consistent rise in per
capita income, as traditionally measured, is
unquestionably an anchor, both in theory and
in practise. It's strange to think of diminishing
per capita income as a sign of progress.
However, while increased per capita income
is vital

Conclusion
In this respective report it has been concluded that with the changes in the price of
the crude oil the demand among the people changes and these variations are due to
the high prices of the crude oil that is very important to be considered by the
people who are there to demand the crude oil.