Crude Oil Supply Curve

M. A. Adelman


Short-run cost curves shift over time as depletion counters increasing knowledge. Under competition, a rightward (leftward) shift indicates lower (higher) cost and greater (lesser) productivity. A simple coefficient captures the slope, and its changes. USA crude oil productivity rose for many years, declined after 1972. In natural gas it can only be discerned since 1984, but has if anything increased. OPEC productivity rose greatly before 1970, reflecting greater plenty not scarcity; later years are not measurable. Non-OPEC productivity increased greatly after 1980.