Suppose natural gas has the following demand and marginal cost in each period.

P=10-Q MC=$2

In addition, there are 34.58 units of natural gas available, and society has a discount rate of and r=0.10. If solar energy can be produced for $6 per unit, in which period (t) is natural gas last extracted? What is the marginal user cost (MUC) in the last period of natural gas extraction?

Assume the first period is given as period 1 (not period 0).

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Price of natural gas is 373today So in T1 period the quantity or units of natural gas ext... View the full answer