Electricit de France (EdF) operates nuclear plants in France Suppose it decides to own uranium mines, a competitive industry, and faces demand P 300 10Q, where Q is tons of uranium and P is ton Marginal extraction cost is 30 The discount rate is 20 Assuming there are only 40 tons of uranium remaini...

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Electricit de France (EdF) operates nuclear plants in France. Suppose it decides to own uranium mines, a

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Electricité de France (EdF) operates nuclear plants in France. Suppose it decides to own uranium mines, a competitive industry, and faces demand P = 300 – 10Q, where Q is tons of uranium and P is €/ton. Marginal extraction cost is €30. The discount rate is 20%. Assuming there are only 40 tons of uranium remaining in the mine, how much should EdF extract today, and how much a year from now? What will be the price of uranium today and one year from now?