Jerry discovers petroleum bubbling up from the ground near his barn. He pays $8,000 for a petroleum engineer to take a look. The engineer says that, if Jerry puts up a $2 million oil rig, he can expect to pump 40,000 barrels of oil from the ground each year for eight years, and then the well will run dry. Jerry figures he can sell the oil for $35 per barrel at the wellhead (that is, the buyer will pay all transportation). Jerry has a discount rate of 22%. Should he invest in the oil rig

Suppose there are three types of consumers who attend concerts at your university’s performing arts center: students, staff, and faculty. each of these groups has a different willingness to pay for tickets; within each group, willingness to pay is identical. there is a fixed cost of $1,000 to put on a concert, but there are essentially no variable costs. for each concert: i. there are 140 students willing to pay $20. (ii) there are 200 staff members willing to pay $35. (iii) there are 100 faculty members willing to pay $50. a) if the performing arts center can charge only one price, what price should it charge? what are profits at this price? b) if the performing arts center can price discriminate and charge two prices, one for students and another for faculty/staff, what are its profits? c) if the performing arts center can perfectly price discriminate and charge students, staff, and faculty three separate prices, what are its profits?