The rising price of oil has made it feasible to extract oil out of oily sand in Canada.Concerning the oil market this is an example of
A) a higher price elasticity of supply in the long run.
B) a higher price elasticity of supply in the short run.
C) a higher price elasticity of demand in the short run.
D) an inelastic long-run supply of oil.

Question

Quizplus · Accepted Answer

This is an example of a higher price elasticity of supply in the long run because as prices rise, producers are willing and able to invest in the extraction of oil from more costly sources, such as oily sand, thereby increasing the quantity supplied over time.

The Rising Price of Oil Has Made It Feasible to Extract