Table 5-11
-Refer to Table 5-11. Which scenario describes the market for oil in the short run in comparison to the long run?
A)Scenario A describes both the short run and the long run.
B)Scenario D describes both the short run and the long run.
C)Scenario D describes the short run, whereas scenario A describes the long run.
D)Scenario C describes the short run, whereas scenario B describes the long run.

Question

Table 5-11 
-Refer to Table 5-11. Which scenario describes the market for oil in the short run in comparison to the long run?
A)Scenario A describes both the short run and the long run. 
B)Scenario D describes both the short run and the long run. 
C)Scenario D describes the short run, whereas scenario A describes the long run. 
D)Scenario C describes the short run, whereas scenario B describes the long run.

Quizplus · Accepted Answer

In Scenario D, the market for oil is in equilibrium in both the short run and the long run, indicated by the intersection of the supply and demand curves. However, in Scenario A, the market is in short-run equilibrium with a price of $60 and a quantity of 100, but in the long run, the quantity supplied increases causing the price to drop to $40. Therefore, Scenario D describes the short run and the long run and Scenario A describes only the short run. Therefore, Option C is the best choice.

Table 5-11 -Refer to Table 5-11. Which Scenario Describes the Market for the Market