Hi Heather,
"Relative to" in this context really just means "compared to." Thus, that first sentence really could read: "...sharp decrease over the past year in the supply of jet fuel available compared to demand." In other words, demand was sharply greater in the last year when compared to the supply of jet fuel. Now,
from that sentence alone, any number of scenarios could have been possible as long as demand was higher than supply in a comparison sense. For example, both could have dropped overall, but supply dropped more. Or both could have increased, but supply increased much less. The key in that first sentence is that when related to each other, supply was sharply lesser than demand, creating a classic shortage situation which drove up the price.
The possibilities really get narrowed when the second sentence is added in, because it tells us that the supply today is greater than it was last year. At that point, the first scenario I posited above (both dropping) can't occur. Now, since supply is known to be higher, we can refer back to the first sentence and conclude that if supply is down
in comparison to demand, but that supply is up overall, then demand must be up as well. That's what (A) says.
One easy way to grasp this is to use some type of analogy, such as with some other more easily understood liquid, like wine. If the supply of wine is down relative to demand, but there's more wine overall, what happened? Something spurred more demand, and that demand is outstripping the supply, even though it's increased. Or, maybe use something like the new iPhones. That may help cement this idea for you
Please let me know if that helps. Thanks!
