Because producing more oil requires a significant increase in exploration and drilling costs, the supply curve for oil is:
A) relatively elastic.
B) relatively inelastic.
C) either elastic or inelastic.
D) unit elastic.

Question

Quizplus · Accepted Answer

The fact that producing more oil requires a significant increase in exploration and drilling costs suggests that it would be difficult for suppliers to quickly increase their output in response to changes in price. Therefore, the supply curve for oil is relatively inelastic.

Because Producing More Oil Requires a Significant Increase in Exploration