Asked by Yujing Huang on Apr 28, 2024
Verified
OPEC failed to maintain a high price of oil in the long run, partly because both the supply of oil and the demand for oil are more elastic in the long run than in the short run.
OPEC
The Organization of the Petroleum Exporting Countries, an intergovernmental organization of 13 oil-producing nations that collaborate to manage the supply and set the price of oil.
Elastic
Describes a situation where the quantity demanded or supplied of a good or service significantly changes in response to a change in price.
- Ascertain the components that impact the price flexibility of supply and demand.
Verified Answer
CS
Chandra SekharMay 01, 2024
Final Answer :
True
Explanation :
In the long run, both consumers and producers have more time to adjust to price changes, making the demand and supply of oil more elastic. Consumers can switch to alternative energy sources, and producers can invest in new oil fields or alternative extraction methods, reducing OPEC's ability to maintain high prices.
Learning Objectives
- Ascertain the components that impact the price flexibility of supply and demand.
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