Efficient Allocation Calculation | Instant Homework Solutions

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July 6th, 2021

In the numerical example given in the text, the inverse demand function for the depletable resource is P = 8 – 0.4q and the marginal cost of supplying it is $4. – If 12 units were to be allocated between two periods, in a dynamic efficient allocation, how much would be allocated to the first period and how much to the second when the discount rate is 10 percent (i.e., r = 0.10)? – What would be the efficient price in the two periods? – What would be the marginal user cost in each period?

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