Suppose the marginal benefit of a unit of a certain non-renewable resource is given by MB-100- 3Q. (Q is the total extracted amount in a certain period) The marginal cost of extracting a unit of this resource is 10. The risk-free interest rate is 10%. 1) In a two-period model, under what condition will MUC be zero in both periods on the optimal extraction path?

Suppose the marginal benefit of a unit of a certain non-renewable resource is given by MB-100- 3Q. (Q is the total extracted amount in a certain period) The marginal cost of extracting a unit of this resource is 10. The risk-free interest rate is 10%. 1) In a two-period model, under what condition will MUC be zero in both periods on the optimal extraction path?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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hi i need help with part b i and ii. Here are the previous steps from part a.
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