If the price of oil is $60 per barrel, the quantity of oil supplied is 70 million barrels per day. If the price is $40 per barrel, the quantity of oil supplied is 69 million barrels per day. This implies that the
A) demand for oil is inelastic.
B) supply of oil is inelastic.
C) demand for oil is elastic.
D) supply of oil is elastic.

Question

Quizplus · Accepted Answer

The supply of oil is inelastic because a significant change in price ($20) results in a very small change in the quantity supplied (1 million barrels per day), indicating that the quantity of oil supplied does not significantly respond to price changes.

If the Price of Oil Is $60 Per Barrel, the Quantity