There are seven oil and gas producing regions in the US.The data for the production quantity of oil from each region are listed below.Also provided is the cost to each region of producing a barrel per oil.Because the producing regions are not always located near where consumers are, there are also the costs associated with transporting the oil (like the costs of using a pipeline) which vary by region. Prior to the pandemic, all these regions were producing at full capacity.we can assume the demand for oil is fully inelastic.

1-Explain what it means that demand for crude oil is inelastic.

2-Which diagram correctly shows supply and demand where demand is inelastic?

Diagram A Diagram B P supply supply demand demand Q QQuantity supplied Cost of supply Transport costs (thousands of Region ($ per barrel) ($ per barrel) barrels per day) Anadarko $65 $3.00 361 Appalachia $75 $6.00 125 Bakken $55 $7.00 1214 Eagle Ford $45 $0.50 1017 Haynesville $70 $2.00 33 Niobrara $40 $6.00 528 Permian $35 $2.50 4333