Finished, notice the palm trees outside
The view inside


Ever wonder why is gasoline $2.39 a gallon for regular unleaded?

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Well, wonder no more. The reason gas is $2.39 a gallon is that's a price we drivers are collectively willing to pay and distributors are collectively willing to sell at - as Don & Russ at Cafe Hayek or Jane at Asymmetrical Information will tell you. It's an auction: not a price-controlled market.

But that aside, this desert ski resort is a good demonstration of marginal costs and profits. I read recently that the Saudi's marginal cost to pump another barrel of oil is a little over $1.00. And Bloomberg's tells me that oil contracts are running around $66 per barrel this week.

Now when you're selling a lot of something for 66 times what it costs you to produce (ignoring the middlemen), you amass a big pile o' dollars and you can afford little extravagances like this ski resort.

Or even big extravagances like this underwater hotel (also located in Dubai). - JdJ