You have two time periods to allocate a fixed amount of a depletable resource. Solve for the equilibrium quantityconsumed now (go) if the inverse demand is p=18-0.2 q in both periods and there is 13 to distribute between theperiods, and the interest rate is 0.1.

Given information P=18-0.2q Total stock=13 Interest rate= 10%

Answered: You have two time periods to allocate a…

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter6: Demand And Elasticity

Section: Chapter Questions

Problem 4TY

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You have two time periods to allocate a fixed amount of a depletable resource. Solve for the equilibrium quantity consumed now (go) if the inverse demand is p=18-0.2 q in both periods and there is 13 to distribute between the periods, and the interest rate is 0.1.