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Aramco (the Saudi company headquartered  in Dhahran) has 30 barrels of oil. The marginal cost of extracting...

Aramco (the Saudi company headquartered  in Dhahran) has 30 barrels of oil. The marginal cost of extracting a barrel is given by MC(q)= 3q.

This means that 3 is the cost of extracting unit number one, and 6 is the cost of extracting unit number two, and 9 is the cost of extracting unit number 3. Assume that we live in a world of two periods.

1. How would Aramco sell those 30 units if the price P=100 in every period and the interest r=0.

2. How would Aramco sell those 30 units if the price P=100 in every period and the interest r=0.05 (five percent). And what about if the interest rate is r=0.1 (ten percent)

3. How would Aramco sell those 30 units if the price P=100 in period 1 and P=105 in period 2, and the interest r=0.05 (five percent).

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