Suppose that four land owners,A,B,C,and D,own adjacent lots.Recently,a pool of oil was discovered that is under all four lots but does not extend beyond the four lots.Below is information on the relationship between number of oil wells,output per well and revenue per well.
-Refer to the information above.If the marginal cost of drilling a well is $94,then each land owner will drill __________ wells for a total of __________ wells.
A) 2;8
B) between 1 and 8;between 4 and 32
C) 4;6
D) between 4 and 8;between 16 and 32
E) 8;32

Question

Suppose that four land owners,A,B,C,and D,own adjacent lots.Recently,a pool of oil was discovered that is under all four lots but does not extend beyond the four lots.Below is information on the relationship between number of oil wells,output per well and revenue per well. 
-Refer to the information above.If the marginal cost of drilling a well is $94,then each land owner will drill __________ wells for a total of __________ wells.
A) 2;8 
B) between 1 and 8;between 4 and 32 
C) 4;6 
D) between 4 and 8;between 16 and 32 
E) 8;32

Quizplus · Accepted Answer

Each land owner will drill 8 wells because the marginal cost of $94 is likely less than or equal to the marginal benefit of drilling each additional well, leading to a total of 32 wells (8 wells per each of the 4 landowners).

Suppose That Four Land Owners,A,B,C,and D,own Adjacent Lots