Answer to Question #219146 in Economics for Sizwe

Question

If a lower price of crude oil leads to lower oil revenue for oil producing countries this suggests that the world demand for oil is
A. Unitary elastic
B. Perfectly elastic
C. Elastic
D. Inelastic

Answer 1

If a lower price of crude oil leads to lower oil revenue for oil producing countries this suggests that the world demand for oil is inelastic, because the percentage increase in quantity demanded is lower than the percentage decrease in price.

So, the correct answer is D.