The concept of a "market" is one of the most frequently used items in the economists' analytical tool kit; however, applying this concept to real world markets can prove difficult. Thus, the market for U.S. corporate bonds encompasses not only Wall Street, existing bondholders, and firms with bonds outstanding, but also potential bondholders and corporations located in other cities, states, and nations. To be sure, the prevailing price of bonds is determined at the margin by those buyers and sellers active in the market on any given day; however, failure to consider potential sources of supply and demand in any attempt to explain bond prices would clearly be erroneous. In sum, a market exists whenever and wherever buyers and sellers can interact freely such that the prices of identical commodities tend to equality easily and quickly.

This chapter analyzes and describes the geographic scope of the markets for energy, namely, the markets for uranium, bituminous coal and lignite, natural gas, and crude oil. Estimates of the geographic scope of each of these markets are provided, both in terms of their current scope and likely configuration in the foreseeable future.

COMMODITIES AND MARKETS

In the strictest sense of the term, a commodity is characterized by its physical properties and the time and location at which it is available. The price of a commodity is the amount which must be paid now to secure ownership (present