Economic System

Economic System

The economic system that is best suited for handling a crisis of epic proportions is the free market system. Free market system is “economic system in which decisions about what to produce and in what quantities are decided by the market’s buyers and sellers.” (Bovee, 2012) Because prices can be negotiated by “supply and demand” and not because some people want to take advantage of a terrible situation, the free market is a better economic system to use. ("How to Survive an Economic Crash Depression: Money Needs During a Disaster", n.d.,)

Socialist System

A socialist system might be the best in responding to the needs of people struck by an emergency situation. Socialism is defined as “economic system characterized by public ownership and operation of key industries combined with private ownership and operation of less-vital industries.” (Bovee, 2012). A socialist system can allow an area, or country to focus on recovery efforts and resources. The survivors of the earthquake in Haiti in 2010 needed food, water, clothing, medication, and shelter. During natural disasters, volunteers are set in place to help alleviate the needs that have occurred. (Socialism or your money back, 2010).

Supply and Demand

Supply and demand is “how prices are set for the sale of goods. The process starts with consumers demanding goods.” ("The Law of Supply and Demand", n.d.). When a demand is high, the provider can charge a higher price for goods. Some of the factors that can contribute to supply and demand of heat during the winter months are the season, cost of crude oil, local markets, and operational costs. ("Factors Affecting Heating Oil Prices » Oil Heat Council of New Hampshire", n.d.) When demand is highest for heat, which is normally in the winter, the demand for crude oil is higher. The prices can rise quickly depending upon the need for the crude oil for heating homes and businesses.

Changes in crude oil prices can affect the pricing of heating...