Question #3: The example oil well in the United States Assume the well described in Question #1 is drilled in the United States under a lease agreement with a private landowner: the landowner receives a 25% royalty (which in fact depends on the negotiated lease but this is a representative number), the government taxes total revenues at 7% (a production tax") and collects a 35% income tax. Capital costs are depreciated (treated as expenses when calculating taxes) in equal amounts over 7 years. A. How much does the government earn from the well over its life? How much does the private oil company earn from the well over its life? How much does the landowner earn? What is the total profit to all parties? B. In what year would it make sense for the investor to plug & abandon the well? C. Quantify the dead weight loss of this regulatory regime relative to Question #1.