Scarcity and World Oil Prices
- 1 August 1986
- journal article
- Published by JSTOR in The Review of Economics and Statistics
- Vol. 68 (3) , 387
- https://doi.org/10.2307/1926015
Abstract
The current (Summer 1985) world oil price, and changes since 1973, cannot possibly be explained by scarcity, or by changes in scarcity. The level and dispersion of marginal costs, and the pattern of investment behavior since 1973, prove that supply is being restricted to maintain the price, which can be maintained "only so long as the low-cost oil is dammed up. If the dam breaks, so will the price."Keywords
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