Question: Consider a nonrenewable resource that can be consumed either today (period 1) or tomorrow (period 2) and has a finite supply of 5 units.Assume the

Consider a nonrenewable resource that can be consumed either today (period 1) or tomorrow (period 2) and has a finite supply of 5 units.Assume the inverse demand for the resource in both periods is:

P_1 = 25 - 5Q_1

P_2 = 25 - 5Q_2

Assume the marginal cost of extracting the resource is constant at $5and the socialdiscount rate is 25 percent (r= .25).

Assuming the resource is allocated efficiently, what is the consumer surplus in period 1?

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