QUESTION 2 Think the two-period model for coals. Suppose a demand schedule is P = 80 - 0.5Q and a supply schedule is MC = 10 + 0.5Q, for a two-period model. Period 1 is current time and period 2 is future, a year later. Annual discount rate is 20%. The supply of coals is limited to 100 units. The dynamically efficient quantities for period 1 and 2 are Q₁= and Q2= respectively. The dynamically efficient prices for period 1 and 2 are P₁ = and P2= respectively. Hint: Round the numbers to two decimal places.

QUESTION 2 Think the two-period model for coals. Suppose a demand schedule is P = 80 - 0.5Q and a supply schedule is MC = 10 + 0.5Q, for a two-period model. Period 1 is current time and period 2 is future, a year later. Annual discount rate is 20%. The supply of coals is limited to 100 units. The dynamically efficient quantities for period 1 and 2 are Q₁= and Q2= respectively. The dynamically efficient prices for period 1 and 2 are P₁ = and P2= respectively. Hint: Round the numbers to two decimal places.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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