Suppose the MWTP in periods 1 (now) and 2 (one year from now) is given by P = 8 - 0.4q Marginal extraction cost = $2.r = 20%. The available supply is 20 units. Determine the allocation of outputs across the two periods that maximizes the present value of the net benefits for the use of the resources. Draw your answer on a graph similar to Figure 5.2 in the text, using engineering graph paper with fine detail (small squares) on the back of this sheet.
Suppose the MWTP in periods 1 (now) and 2 (one year from now) is given by P = 8 - 0.4q Marginal extraction cost = $2.r = 20%. The available supply is 20 units. Determine the allocation of outputs across the two periods that maximizes the present value of the net benefits for the use of the resources. Draw your answer on a graph similar to Figure 5.2 in the text, using engineering graph paper with fine detail (small squares) on the back of this sheet.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Suppose the MWTP in periods 1 (now) and 2 (one year from now) is given by P = 8 - 0.4q Marginal extraction cost = $2.r = 20%. The available supply is 20 units. Determine the allocation of outputs across the two periods that maximizes the
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