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Oil is inelastic because it is a normal product , if the price goes up the consumers will still need to buy it because there are few substitutes such as the gas and the green energy, and the oil is necessity for the consumers. however,any increase in the price of oil will not lead to decrease in the consumption in large quantity. In this point we can argue from two perspectives

Firstly, the consumers perspectives: if the price of oil goes up then the consumer will tend to find alternative to oil. For example, the consumer will not use their own transportation, they will tend to use the public transportation, however there will be some people who can afford the rising prices, hence they will continue consuming the oil .

Secondly, the governmental perspective: if the price goes up and it has long term upward trend then the government will try to invest in the other source of power such as green energy.

Hence, the oil is inelastic but in the short term and the next chart can explain the two perspectives.

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Q: Why is oil an inelastic good?
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