1- One Suppose P=8-0.2q in each of the two periods MC in each of the two periods =$4 Supply of the resource is 20 units a)Calculate the Dynamically efficient allocation of this depleted resource over the two periods if the discount rate is 10% b)Calculate marginal user cost in each period

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1- One Suppose P=8-0.2q in each of the two periods MC in each of the two periods =$4 Supply of the resource is 20 units

a)Calculate the Dynamically efficient allocation of this depleted resource over the two periods if the discount rate is 10%

b)Calculate marginal user cost in each period

2- Consider the inverse demand functions for two users of water A and B User A P=8-0.2 qA User B P=8-0.2 qB

If the marginal cost of providing water is constant and equal to $2 and the supply of water is equal to 30 units, solve for the statically efficient allocation of water among the two users

 

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