Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

Exercise 26

Wildcat John owns a few low-quality oil wells in Hawaii. He was heard complaining recently about the low price of crude oil: ''With this $70 per barrel price, I can't make any money it costs me $90 per barrel just to run my oil pumps. Still, I only paid $1 an acre for my land many years ago, so I think I will just stop pumping for a time and wait for prices to get above $90. What do you make of John s production decisions?