Part one of term paper
Back in the middle of October, the price of natural-gas had risen because a gas company was forced to shut down a pipeline due to the need for repairs. This impending shortage led to the decrease in prices for other heating commodities, as well as larger profits. The demand for energy was becoming greater and greater because it was that t ...

Part two of term paper
... in the quantity demanded of one commodity results from a one percent change in the price of another commodity. In other words, the increase in demand for crude oil, gasoline, and heating oil was the outcome of the price increase in natural gas. As shown in the graph below, the cross elasticity of demand is direct (positive). As the price of natural increases, the quantity demanded for the three other energy commodities increase. The market system today functions on price. Consumers make their ...