Suppose we allocate a fixed supply of a depletable resource between two periods in a dynamically efficient way. Assume further that the demand function is constant in the bwo periods and the marginal willingness to pay is given by the formula P7-0.46g while the marginal cost is constant at 51 per unit. The total supply is 18 units and the discount rate is 2%. What is the marginal user cost during the first period?

Suppose we allocate a fixed supply of a depletable resource between two periods in a dynamically efficient way. Assume further that the demand function is constant in the bwo periods and the marginal willingness to pay is given by the formula P7-0.46g while the marginal cost is constant at 51 per unit. The total supply is 18 units and the discount rate is 2%. What is the marginal user cost during the first period?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter10: Cost Functions

Section: Chapter Questions

Problem 10.10P

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