Suppose the following for a resource (measured in tons): Market demand schedule is Pd = 200 - 4Q Market supply schedule is Ps = 80 + 2Q. Total Reserve is 30 tons There are 2 periods (each period is 5 years) The Discount rate is 6.5% What is the socially efficient quantity for period 1?

Suppose the following for a resource (measured in tons): Market demand schedule is Pd = 200 - 4Q Market supply schedule is Ps = 80 + 2Q. Total Reserve is 30 tons There are 2 periods (each period is 5 years) The Discount rate is 6.5% What is the socially efficient quantity for period 1?

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter30: Market Failure: Externalities, Public Goods, And Asymmetric Information

Section: Chapter Questions

Problem 2WNG

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Question

Suppose the following for a resource (measured in tons):

Market demand schedule is Pd = 200 - 4Q
Market supply schedule is Ps = 80 + 2Q.
Total Reserve is 30 tons
- There are 2 periods (each period is 5 years)
- The Discount rate is 6.5%
What is the socially efficient quantity for period 1?

The equilibrium quantity will be 20 and the market price will be 120.

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