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I understand that the price elasticity of supply is just the percentage change in quantity supplied for a percentage increase in price of an item. However, when I look on Wikipedia, I am struggling to understand why the Supply Elasticity for Oil would be more than 1, which is contrast to what is mentioned in Investopedia. However, I feel like Investopedia is right on this one, in that suppliers of oil will not be able to significantly change supply for an increase in oil price.

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    $\begingroup$ I searched the page and found only one use of the word oil. And this was when the page discusses the elasticity of heating oil. Do you mean crude oil? Or are you perhaps referencing the measure of supply elasticity provided for gasoline? $\endgroup$ – 123 Sep 29 '16 at 20:25
  • $\begingroup$ @Jojo, great! I turned the comment into an answer so it's easier for future visitors to see. $\endgroup$ – Ubiquitous Sep 30 '16 at 15:39
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To elaborate on 123's comment, crude oil is extracted from the ground and can be manufactured/refined into a variety of produces (vehicle fuel/plastics/kerosene/etc.) If the price of kerosene increases, then it is natural for produces to want to substitute from producing plastic to producing more kerosene. Even if the supply of oil (of all varieties) is inelastic, the supply of individual oil-based products need not be.

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    $\begingroup$ Indeed. In addition, firms extracting crude oil can store large quantities of oil and control its ebb and flow into global markets. There can be a short-term measure of supply elasticity for crude that is itself > 1. $\endgroup$ – 123 Sep 30 '16 at 19:29

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