Crude oil from Canada to US

by | Sep 4, 2021 | Assignment Help

The file is attached.Problem 1You own a small pipeline that transports crude oil from Canada to the US. Yours is one of many such pipelines (which we’ll label “S”, for small) operating in this competitive market, each of whose cost is $3/bbl (barrel). There are two other ways to export crude oil from Canada’s tar sands as well. The cheapest way is via a large pipeline (“XL”), whose cost is $1/barrel, and the most expensive way is by rail (“R”), with a cost of $4/barrel. Total capacity of XL, S, and R are 10, 40, and 30 MMbbl/day (millions of barrels per day), respectively. Assume that the market is perfectly competitive, and that there is no entry or exit.US demand for Canadian oil is perfectly inelastic at 35 MMbbl/day in the winter, an

This is a sample question

Need help with a similar assignment?

Place an order at Study Pirate

Attach all custom instructions.

Make Payment. (The total price is based on number of pages, academic level and deadline)

We’ll assign the paper to one of writers and send it back once complete.