The world's price of oil increased dramatically in 1973.Which of the following statements was most valid in 2012?
A)The price elasticity of demand for oil for the 40 year period would be lower than for a shorter period.
B)The price elasticity of demand for oil for the 40 year period would be higher than for a shorter period.
C)The income elasticity for oil was much lower in 2012 than in 1973 because of the price increase.
D)The supply elasticity of oil was much lower in 2012 than in 1973 because of the price increase.

Question

Quizplus · Accepted Answer

Over a longer period, consumers and businesses have more time to adjust to price changes, leading to a higher price elasticity of demand for oil compared to a shorter period.

The World's Price of Oil Increased Dramatically in 1973