A shift of the supply curve of oil raises the price from $10 a barrel to $15 a barrel and reduces the quantity demanded from 40
million to 15 million barrels a day. You can conclude that the ___________. A. demand for oil is inelastic
B. demand for oil is elastic
C. supply of oil is elastic
D. supply of oil is inelastic
Price elasticity of demand is generally note to be the magnitude (degree) responsiveness of quantity demanded of goods/services to a change in price of goods and services.
A demand for goods and services is said to be elastic if the demand by consumer is relatively sensitive to changes in price.
The long-run demand for oil is usually elastic than the short run demand for oil.