Answer to Question #168843 in Finance for D'Ayona Wester

Question #168843

How would the supple of oil change giving improvements in drilling equipment?


1
Expert's answer
2021-03-04T15:11:43-0500

Oil markets have low price elasticity of demand. Supply of oil is also less elastic than other goods. This means that both supply and demand for oil is not responsive to changes in price. High prices of oil has a significant sales growth for oil industries and an economic growth decrease for the other industries that use oil products . On the other hand, low prices of oil shows an economic growth decrese for the oil industries and significant sales growth for the other industries that use oil products. The supple oil will make the drilling equipments be flexible, bending and move easily .The supple of oil will improve the function of the drilling equipments ,make it last longer and make work easier for the industries using such machines hence making huge sales and profits.


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