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
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
Chapter32: The Land Market And Natural Resources
Section: Chapter Questions
Problem 8E
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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 present value of the net benefits for the use of the resources. Draw
your answer on a graph i dont know how to solve this i need to see how the
calculations are done and how the graph would look, please Thank you](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8e363dfb-70b5-4da7-b453-3724adbb6e76%2F6a5b8248-439d-4f8a-912d-fb67b232e2b1%2Feoqazwl_processed.png&w=3840&q=75)
Transcribed Image Text: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 i dont know how to solve this i need to see how the
calculations are done and how the graph would look, please Thank you
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