Why Is the Demand Curve for Oil Rather Inelastic

question 225

Multiple Choice

Why is the demand curve for oil rather inelastic?

• A) There are few widely available good substitutes for oil.
• B) To increase the production of oil requires a significant outlay of exploration and drilling costs.
• C) The world supply of oil is low relative to demand.
• D) The demand curve for oil is always perfectly inelastic.

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Definitions:

Product Life Cycle

Refers to the sequence of stages a product goes through from introduction to growth, maturity, and decline.

Competitive Pressure

The force or influence that competitors exert on each other in a marketplace, driving innovation, quality improvements, and often leading to lower prices for consumers.

Product Availability

The extent to which goods or services can be purchased at any given time from a supplier.

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