Future Supply and Demand for Crude Oil
Price per barrel (2208) Daily US demand for crude oil (in millions of barrels per day) Daily US supply of crude oil (in millions of barrels per day)
$25.00 1.0 0.5
$30.00 0.9 0.6
$35.00 0.8 0.7
$40.00 0.7 0.8
$45.00 0.6 0.9
$50.00 0.5 1.0
$55.00 0.4 1.1
Data from https://www.iea.org
Question 1:
Equilibrium:
Question 2
Question 3
Question 4
Question 5
Profit Maximization
Base price of unleaded regular delivered in New York harbor (January 27, 2020) $1.517
Added cost to Cal:
Maryland state gasoline tax (Effective July 1, 2018) $0.353
Federal gasoline tax $0.184
Distribution & Delivery $0.042
Advertising and Marketing to Exxon Mobil $0.042
Additives $0.020
Total additions $0.641
Total cost per gallon $2.158
Answer question 1 below.
Quantity Price
4000 2.658
3600 2.758
Average Average
% change % change Elasticity of Demand
Elasticity:
By how much did revenues increase or decrease as a result of the change in price?
By how much did profits increase or decline?
Gallons sold per day Price Revenue (price x gallons) Cost per Gallon Variable Cost (cost per unit x volume) Fixed cost per day Total Cost (Fixed + Variable) Daily Profit (revenue – all costs)
4000 $2.658 $10,632.00 $2.158 $8,632.00 $438.00 $9,070.00 $1,562.00
3600
Answer question 2 below.
Quantity Price
3600 2.758
4400 2.558
Average Average
% change % change Elasticity of Demand
Elasticity:
By how much did revenues increase or decrease as a result of the change in price?
By how much did profits increase or decline?
Gallons sold per day Price Revenue (price x gallons) Cost per Gallon Variable Cost (cost per unit x volume) Fixed cost per day Total Cost (Fixed + Variable) Daily Profit (revenue – all costs)
3600
4400
Answer question 3 below.
Quantity Price
4400 2.558
4800 2.458
Average Average
% change % change Elasticity of Demand
Elasticity:
By how much did revenues increase or decrease as a result of the change in price?
By how much did profits increase or decline?
Gallons sold per day Price Revenue (price x gallons) Cost per Gallon Variable Cost (cost per unit x volume) Fixed cost per day Total Cost (Fixed + Variable) Daily Profit (revenue – all costs)
4400
4800
Profit Maximization
Gallons sold per day Price Revenue (price x gallons) Cost per Gallon Variable Cost (cost per unit x volume) Fixed cost per day Total Cost (Fixed + Variable) Daily Profit (revenue – all costs)
2400 $3.058 $7,339.20 $2.158 $5,179.20 $438.00 $5,617.20 $1,722.00
2800 $2.958
3000 $2.908
3200 $2.858
3600 $2.758
4000 $2.658
4400 $2.558
4800 $2.458
5200 $2.358
5600 $2.258
6000 $2.158
6400 $2.058
6800 $1.958
7200 $1.858
7600 $1.758
8000 $1.658
8400 $1.558
8800 $1.458
9200 $1.358
Answer question 5 below.
Marginal Revenue Marginal Cost
Gallons sold per day Price Revenue (price x gallons) Marginal revenue Cost per gallon Variable Cost Fixed Cost Total Cost Marginal Cost
2800.0 $2.958000 $8,282.40 $2.158 $6,042.40 $438.00 $6,480.40
2800.1 $2.957975 $8,282.63 $0.2258 $2.158 $6,042.62 $438.00 $6,480.62 $0.2158
3000.0 $2.908000
3000.1 $2.907975
3200.0
3200.1
3600.0
3600.1
4000.0
4000.1
4400.0
4400.1
4800.0
4800.1
5200.0
5200.1
5600.0
5600.1
Select One
Price Elastic
Price Inelastic
Unit Price Elastic