You are on page 1of 9

Rental license is rates If the land or to be sold outright and Prices rather than rented, the

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

Two-Tiered Oil Pricing PRICE


P*
Supply @ $5

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

You might also like