Consider a two-period model in which oil (still in inelastic supply) can be used in either this period or the next period. In equilibrium, the price in the next period must be higher than the price in this period, if an owner of oil is to be willing not to sell it during this period. Explain why if the interest rate is 10 percent, the price must be 10 percent higher. (The principle that price must rise at the rate of interest is called Hotelling's principle, after Harold Hotelling, a distinguished professor of statistics at Columbia and North Carolina State, who first enunciated it almost three-quarters of a century ago.) What are the consequences of imposing a tax on oil at the same rate in both periods?