A-level Paper 1, June 2025Markets and Business Behaviour
A-level Paper 1, June 2025, Q2(a)
With reference to the data above, explain the likely numerical value of the price elasticity of supply for oil.
Short answerExplain4 marks
Context
In 2022 the UK government provided 130 new licences for North Sea oil and gas exploration, in order to reduce energy prices. However, companies can take 20 years to begin to extract oil. Furthermore, they often have to continue producing oil even when prices fall because the equipment has no other uses.