> When people consume less, prices drop. Again, it's the Law of Supply & Demand.
No, they don't: not if supply is inelastic.
The law of supply and demand says that the price of a good will tend to the price at which supply meets demand. If supply has a maximum, so does demand: any change in theoretical demand above that max will do nothing to affect the price.
If the entire economy produces 10 gallons of oil per day, the fact that today 100 people wanted 1 gallon each, while yesterday 1000 people wanted 1 gallon each, will do nothing to affect the price: I'm still only going to sell to the 10 highest bidders. Of course, if suddenly only 9 people are left using oil, I will indeed be forced to lower my price - but until then, lower demand will have no impact.
You seem to be basing your opinions on some other "Law" of Supply and Demand that somehow claims that Supply will always rise to meet Demand. That "Law" is simply false, and you should discard it.
No, they don't: not if supply is inelastic.
The law of supply and demand says that the price of a good will tend to the price at which supply meets demand. If supply has a maximum, so does demand: any change in theoretical demand above that max will do nothing to affect the price.
If the entire economy produces 10 gallons of oil per day, the fact that today 100 people wanted 1 gallon each, while yesterday 1000 people wanted 1 gallon each, will do nothing to affect the price: I'm still only going to sell to the 10 highest bidders. Of course, if suddenly only 9 people are left using oil, I will indeed be forced to lower my price - but until then, lower demand will have no impact.
You seem to be basing your opinions on some other "Law" of Supply and Demand that somehow claims that Supply will always rise to meet Demand. That "Law" is simply false, and you should discard it.