# In the numerical example given in the text, the inverse demand function for the depletable resource is

## Question:

In the numerical example given in the text, the inverse demand function for the depletable resource is P = 8 – 0. 4q and the marginal cost of supplying it is $2.

**(a)** If 20 units are to be allocated between two periods, in a dynamic efficient allocation how much would be allocated to the first period and how much to the second period when the discount rate is zero?

**(b)** Given this discount rate what would be the efficient price in the two periods?

**(c)** What would be the marginal user cost in each period?

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**Related Book For**

## Environmental And Natural Resources Economics

**ISBN:** 9780131392571

9th Edition

**Authors:** Tom Tietenberg