Professional Documents
Culture Documents
equilibrium price would be the present value of the stream of rental payments
Politics of Rent
Energy Policy
Imported oil would Two-Tiered Oil Pricing sell for whatever its Adopted by market price was, but Congress oil - oils that domestic were produced from wells that were in place before 1974 - would sell for its old price: the price that it sold for before OPEC
Supply @ $15
Equilibrium Price
Demand
q*
Use Domestic Use Imported
QUANTITY
Price Controls
Each availability of cheap to refiner was required The charge a price for gasoline that domestic oil varied with was based on the costs of location. producing the gasoline - which in turn was primarily determined by the cost of the oil that the refiner was able to purchase.
Entitlement Program
Each time a refiner brought a barrel of expensive foreign oil, he got a coupon that allowed him to buy a certain amount of cheap domestic oil.
Entitlement Program
Price Supply @ $15/barrel Supply @ $10/barrel Supply @ $5/barrel
Demand
Quantity