Homework: Chapter 6 Homework Score: 0 of 1 pt End of Chapter 2.6 7 of 20 (6 comp
ID: 1139435 • Letter: H
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Homework: Chapter 6 Homework Score: 0 of 1 pt End of Chapter 2.6 7 of 20 (6 complete) HW Score: 2 Que The price elasticity of Source: John C. B. Cooper, "Price Elasticity of Demand for Crude Oil: Estimate for 23 Countries," OPEC Review, March, 2003, pp. 1-8. The demand for crude oil in the United States for crude oil has been estimated to be -0.061 in the short run and-0.453 in the long run. O A. is price elastic in both the short and long run as there exists many substitutes for crude oil. O B. is more price inelastic in the long run than in the short run because in the short run a substitute for crude oil may be found O C. is more price elastic in the long run than in the short run because in the long run a substitute for crude oil may be found O D. is equally price inelastic in both the short and long run as there are not many substitutes for crude oil. Click to select your answer and then click Check Answer All parts showing o search Clear AllExplanation / Answer
Correct Answer:
C
In the short run, households and firms have no choice, but to buy the oil at higher pricse, so demand is more price inelastic. But in the long run, there can be many alternatives or substitutes to the crude oil. Hence, demand becomes more price elastic in the long run.
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