If crude-oil prices increase as the total amount of gasoline increases,the supply curve for gasoline will be relatively steep and the price of elasticity of supply of gasoline will be:
A)relatively large.
B)perfectly vertical.
C)perfectly horizontal.
D)relatively low.

Question

Quizplus · Accepted Answer

If crude-oil prices increase as the total amount of gasoline increases, the supply curve for gasoline will be relatively steep, indicating that the price elasticity of supply of gasoline will be relatively low. This means that as the price of gasoline increases, the quantity supplied will not change significantly. In other words, the producers of gasoline are not able to increase the quantity supplied much even if the price of gasoline increases. Hence, the supply curve will be steep and the elasticity of supply will be relatively low.

If Crude-Oil Prices Increase as the Total Amount of Gasoline