As exploration for oil continues across the US in areas outside of Texas, new pipeline companies are starting to operate outside of Texas. One such area is in Colorado. Since the need for pipeline companies in Colorado is relatively new, there is only one pipeline company operating in Colorado at present: Aspen pipelines.

In the attached Excel is the consumer demand for the pipeline's services and the costs of running the pipeline.

1) Based off of the description, what kind of market is the pipeline market in Colorado?

a. Competitive

b. Oligopoly

c. Asymmetric

d. Monopoly

2) What kind of cost is the cost of building the pipeline ($1,500,000,000 in the data provided)?

a. Marginal cost

b. Sunk cost

c. Opportunity cost

d.Externality cost

e.Total cost

3) What is the marginal cost per barrel for the pipeline company?

a. $0.80

b. $1.50

c. $3.20

d.$4.01

e. $6.97

4) What price should Aspen pipelines charge to maximize profit?

a. $5.50

b. $5.00

c. $4.75

d. $4.25

e. $4.00