The supply of oil is likely to be
A)inelastic in both the short run and long run.
B)elastic in both the short run and long run.
C)elastic in the short run and inelastic in the long run.
D)inelastic in the short run and elastic in the long run.

Question

Quizplus · Accepted Answer

In the short run, it is difficult for oil producers to increase or decrease their output significantly. Thus, the supply of oil is relatively inelastic in the short run. However, in the long run, oil producers can invest in exploration, development, and production, which allows them to respond more quickly to changes in demand. Therefore, the supply of oil is more elastic in the long run.

The Supply of Oil Is Likely to Be