Using assumption 5 as a starting point, and Marx’s theoretical base, the production price for hydrocarbon products and their market price are defined as:
With: | ||
![]() | eq(2) |
where:
pp: | production price in deposit j. |
![]() | sum of different costs i in the production process for deposit j. |
These are defined as:
![]() | (eq. 3) |
Where:
c jexp: exploration costs for deposit j
c jext: extraction costs for deposit j
c jdev: development costs for deposit j
: normal profit margin
P: market price for the product
pp mg: price of production in marginal deposit
: sum of different costs i in the production process for marginal deposits
pp j: price of production in deposit j
q j: production in deposit j
q j/ Q: relative contribution of each deposit
pp ME: average price of production equal to average cost
RD j: differential rent between deposit j and marginal deposit
RD: total rent differential