Question: 1. In the in-class assignment for chapter 5, we looked at a case where, the inverse demand function for the depletable resource is P =

1. In the in-class assignment for chapter 5, we looked at a case where, the inverse demand function for the depletable resource is P = 11 q and the marginal cost of extracting it is $1 per unit. The total supply of this resource is 10 units. The discount rate is 50%. a. What is the optimal allocation if the discount rate decreases to 20%. b. Explain in words the reasoning behind the optimal allocation for ql and q2 in this case. What is happening here

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