Multiple Choice
If the elasticity of demand for oil is 0.5 and the elasticity of supply for oil is 0.3, then a 1 percent increase in the supply of oil would cause the price of oil to:
A) increase by 1.25 percent.
B) increase by 2.50 percent.
C) decrease by 1.25 percent.
D) decrease by 2.50 percent.
Correct Answer:
Verified
Correct Answer:
Verified
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