Question 3..... Suppose that the aggregate demand for a depletable resource is given by the following .....[35 marks] inverse demand function: P=100-(Q+S) where P is the market price, Q is the amount of depletable resource, and S the amount of renewable resource that consumers can use to substitute the depletable represents resource. The resource extraction is undertaken in the current period only. Suppose that a benevolent supplier is managing the resource, maximising total surplus in this market. The marginal extraction costs are constant for both resources: MEC c 10 = MECS =d=40 The fixed supply of the depletable resource is denoted by Q. (a) [10 marks] If Q=100. calculate the efficient allocation (Q.S) for the depletable and renewable resources. What is the market price (P)? Is the depletable resource scare? If so, what is its shadow price? (b) [10 marks] If Q 80, calculate the efficient allocation (QS) for the depletable and renewable resources. What is the market price (P)? Is the depletable resource scare? If so, what is its shadow price? (c) [10 marks] If Q 50. calculate the efficient allocation (QS) for the depletable and renewable resources. What is the market price (P)? Is the depletable resource scare? If so, what is its shadow price? (d) [5 marks] Explain the relationship between the shadow price and the fixed supply on a graph.