Answer to Question #100436 in Microeconomics for syaa

Question #100436
factors increasing domestic demand for gas
1
Expert's answer
2019-12-16T10:18:25-0500

Factors Increasing Domestic Demand for Gas

Impact of Weather – Bad weather such as storms and hurricanes sometimes make transportation of natural gas from the source to the market impossible. Similarly, during bad weather gas production is stops resulting in an influx of demand, which increases prices. 


Economic Growth – As the economy grows, the prices of natural gas increases. Developing an economy implies robust industrialization, which increases the demand for natural gas. As a result, the price of natural gas increases.  


Natural Gas Storage – Increase in gas storage costs has a direct impact on prices. Therefore, when storage costs increase, the prices of natural gas also increases. 


Political Instabilities – Political instabilities in the gas-producing nations can slow down the production process creating a shortage in the market. Shortage of natural gas results in an increase in prices. 



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