Wednesday, December 16, 2009

What industries are affected by fluctuations in oil prices other than automobiles?

Hi, I'm studying Macroeconomics.. I would like to ask


What industries are affected by fluctuations in oil prices other than automobiles manufacturer? How are they affected?What industries are affected by fluctuations in oil prices other than automobiles?
ALL are. Energy is a major cost component of everything produced. If you are asking which are MORE sensitive than others, you might include chemicals, transportation (especially air and sea) and electric utilities.What industries are affected by fluctuations in oil prices other than automobiles?
That is a pretty broad stroke to cover, but her are a couple to think about. All production that involves transporting either raw or the final product.


Example would be the computer you are using now every part had to get shipped to an assembly location, then the final product had to get ship to a retail location for purchase. Certain aspects of the cost to build the computer are fixed, ie the lease on the building and certain are adjustable such as fuel. the adjustable costs are the ones that can really mess up a company by digging into their profits if they go high before price can be adjusted. You might think it would be easy to just assume high adjustable costs, but this would make your product cost high and uncompetitive in the market place.


Another example would be produce in America, you can wiki to get the exact percentages. When you dissect the costs of produce to the consumer it breaks down somewhat like this farmer 5%, pickers 10%, store 30%, transportation 65%. So as the cost of fuel goes up food costs go up.


I hope this helped get you started.

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