Consumers Can Use Either Natural Gas or Heating Oil to Warm

Essay

Consumers can use either natural gas or heating oil to warm their houses. Suppose the price of natural gas increases. Use a demand and supply diagram to show the impact of the higher price of natural gas on the market for home heating oil. $$\begin{array} { | l | l | l | } \hline \begin{array} { l } \text { Price (dollars per } \\\text { disk) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { demanded } \\\text { (millions of disks } \\\text { per month) }\end{array} & \begin{array} { l } \text { Quantity supplied } \\\text { (millions of disks } \\\text { per month) }\end{array} \\\hline 0.50 & 50 & 0 \\\hline 1.00 & 40 & 15 \\\hline 1.50 & 30 & 30 \\\hline 2.00 & 20 & 45 \\\hline 2.50 & 10 & 60 \\\hline 3.00 & 0 & 75 \\\hline\end{array}$$