Discussion - 4
Part 1
Increase cost of oil directly impact oil-based products such as gasoline, diesel, and other oilbased products prices will be increased. The oil-based products suppliers should increase the
price because they should cover their cost due to increasing cost of oil price. There is no
opportunity cost for the suppliers to bring an oil-based product in the market without increase
price. The essential material required to produce the product will cost increase, the output will
increase. Oil based products- raw materials require and important products to produces oil-based
products in both US and other parts of the world, there is no geographical differences, so that the
cost of oil affect the whole world because the cost oil rises, the cost of producing will rise.
Reference
Thomas, Managerial Economics, 13e Christopher Thomas, 13e
https://www.forbes.com/sites/michaelgoldstein/2022/02/07/will-the-merger-between-frontier-andspirit-airlines-fly/?sh=6da1d5f73c78
https://www.columbiatribune.com/story/business/2012/03/03/oil-prices-affect-costfood/21631694007/