A shift of the supply curve of oil raises the price from $70 a barrel to $80 a barrel and reduces the quantity demanded from 40 million to 38 million barrels a day. You can conclude that the
A) demand for oil is elastic.
B) demand for oil is inelastic.
C) supply of oil is elastic.
D) supply of oil is inelastic.

Question

Quizplus · Accepted Answer

The increase in price from $70 to $80 leads to only a small decrease in quantity demanded from 40 million to 38 million barrels, indicating that the demand for oil is inelastic.

A Shift of the Supply Curve of Oil Raises the Price