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MBA‐103: MANAGERIAL ECONOMICS

CNG VEHICLES HAVE ARRIVED
Asst. Prof. Sovan Mangaraj
Astha School of Management
sov.mba@gmail.com

STUD CASE

LYSIS Y AN A

A case is usually a description of an actual situation. a problem or an issue faced by a person or persons in an organization. challenge.S NALYSI DY A SE STU CA MBA‐103: MANAGERIAL ECONOMICS CASE STUDY ANALYSIS Case Study Analysis is a tool to bridge the gap between conceptual learning and application skill of a student. opportunity. . commonly involving a decision.

Mercedes-Benz. Some of the countries have taken big lead in this field.00 per litre petrol. A look at prices will make the point more clear. Although India has only 1.S NALYSI DY A SE STU CA MBA‐103: MANAGERIAL ECONOMICS CNG Vehicles Have Arrived in car CNG has grown into one of the major fuel sources used engines globally. Fiat. Pakistan tops the list with more than 60 percent vehicles running on CNG followed by Armenia (32 percent). Honda. Renault. Consumers throughout the country are following suit. Ford. The main factors causing this rapid growth included the current energy crisis. Hyundai. Toyota and Volkswagen. increasing environmental awareness.00 per kg compared with Rs. and the price differentials between CNG and petrol. more than 28 CNG models are in production globally by Audi.3 percent of its vehicles running on CNG. Automakers are currently vying for marketing positions to . In all. In India CNG costs are at Rs. Peugeot. Opel.67. 30. because the use of CNG is mandated for the public transport system of New Delhi. but New Delhi is home to the largest fleet of CNG public transportation vehicles in the World. Lincoln.

S NALYSI DY A SE STU CA MBA‐103: MANAGERIAL ECONOMICS CNG Vehicles Have Arrived • CNG has grown into one of the major fuel sources used in car engines globally. 30. and the price differentials between CNG and petrol (In India CNG costs are at Rs.) • Pakistan tops the list with more than 60 percent vehicles running on CNG.67.00 per litre petrol. • Although India has only 1. but New Delhi is home to the largest fleet of CNG public transportation vehicles in the World.3 percent of its vehicles running on CNG. • The main factors causing this rapid growth included the current energy crisis. increasing environmental awareness. because the use of CNG is mandated .00 per kg compared with Rs.

what could be the reason for difference in usage of CNG in India and Pakistan? What more information do you need to give a conclusive answer? .S NALYSI DY A SE STU CA MBA‐103: MANAGERIAL ECONOMICS CNG Vehicles Have Arrived Questions: • What is the relation between the demand for CNG and petrol? What will be the impact on demand for CNG if price of petrol declines? • In your opinion.

or propane/LPG. to less than 1% of the volume it occupies at standard atmospheric pressure. . It is stored and distributed in hard containers at a pressure of 200–248 bar (2900–3600 psi). CNG-powered vehicles have lower maintenance costs when compared with other fossil fuel-powered vehicles. CNG is made by compressing natural gas (which is mainly composed of methane [CH4]).S NALYSI DY A SE STU CA MBA‐103: MANAGERIAL ECONOMICS What is CNG? Compressed Natural Gas (CNG) is a fossil fuel substitute for gasoline (petrol). Compressed natural gas vehicles require a greater amount of space for fuel storage than conventional gasoline powered vehicles. usually in cylindrical or spherical shapes. diesel.

S NALYSI DY A SE STU CA MBA‐103: MANAGERIAL ECONOMICS Related Theory .

S NALYSI DY A SE STU CA MBA‐103: MANAGERIAL ECONOMICS Related Theory SUBSTITUTION EFFECT An effect caused by a rise in price that induces a consumer (whose income has remained the same) to buy more of a relatively lower-priced good and less of a higher-priced one. .

in response to a 10% increase in the price of fuel. For example. the cross elasticity of demand would be: . while a positive cross elasticity denotes two substitute products. if. • It is measured as the percentage change in demand for the first good that occurs in response to a percentage change in price of the second good. the demand of new cars that are fuel inefficient decreased by 20%.S NALYSI DY A SE STU CA MBA‐103: MANAGERIAL ECONOMICS Related Theory CROSS ELASTICITY OF DEMAND • In economics. the cross elasticity of demand measures the responsiveness of the demand for a good to a change in the price of another good. . • A negative cross elasticity denotes two products that are complements.