Final answer:
In the short-run market for oil, if the price is below equilibrium, there is excess demand, leading to shortages. As a result, prices will tend to rise towards equilibrium as oil companies seek to maximize profits.
Step-by-step explanation:
In the market for oil in the short run, demand can exhibit various behaviors based on market conditions. If the price of oil is below its equilibrium price, there tends to be excess demand or a shortage. This happens because the lower price increases the quantity demanded while decreasing the quantity supplied. As a consequence, consumers may find themselves facing gasoline shortages at gas stations. Recognizing a chance to increase profits, oil companies and gas stations may raise their prices, which leads to a rise in price towards equilibrium. It is important to understand that demand, in this context, is the quantity of oil that consumers are willing and able to purchase at a given price. Changes in other factors, such as technology (like the invention of new oil-drilling equipment), can also shift demand and supply curves, affecting market prices and quantities in the short run.