Why is the supply curve for oil rather inelastic?
A) There are not many widely available good substitutes for oil.
B) To increase the production of oil would require a very significant outlay in terms of costs of exploration and drilling.
C) The world supply of oil is decreasing.
D) The supply curve for oil is always perfectly inelastic.

Question

Quizplus · Accepted Answer

The supply curve for oil is rather inelastic because increasing production requires significant investment in exploration and drilling, making it difficult to quickly adjust supply in response to price changes.

Why Is the Supply Curve for Oil Rather Inelastic