Reference no: EM131424763
Suppose the demand function for a mineral (exhaustible resource) is given by pt = 700 - 0.2qt:
Assuming that the marginal cost of extraction is constant and equal to $200 per unit extracted, and the discount rate (r) is 0:05.
(a) State the values of the maximum(choke) price and marginal revenue
(b) State the equation of resource rent at any time t, both under perfect competition and monopoly while explaining the intuitions
(c) State the equations of the optimal price and extraction paths under perfect competition
(d) State the equations of the optimal price and extraction paths under monopoly
(e) Present, graphically, comparisons of optimal price and extraction paths under perfect competition and monopoly
(f) Assuming that the resource depletes in 5 years, determine prices, quantity extracted, and rents in year 2 under both market assumptions and explain the differences.
Assume the account earns interest
: You deposit $1000 now and you want the account to have a value as close to $8870 as possible in year 20. Assume the account earns interest at 10% per year. The year in which you must make another deposit of $1000 is?
|
An important distinction in health insurance
: An important distinction in health insurance is between the list price (PL) and out-of- pocket price (PP) of a medical good or service. The list price is the official price that the provider charges the insurance company, while the out-of-pocket pric..
|
What best reflects the change in the market
: In 2013 BusinessWeek Online reported that car sales in China had slowed and cited the government's bid to restrict credit to consumers as the reason. Assuming the car market in China can be analyzed with demand and supply curves, what best reflects t..
|
What are the primary concerns of business customers
: Why might business customers generally be considered morw rational in their purchasing bevavior than ultimate customers? What are the primary concerns of business customers? List several characterisitics thar differentiate business transactions from ..
|
Suppose the demand function for mineral
: Suppose the demand function for a mineral (exhaustible resource) is given by pt = 700 - 0.2qt: Assuming that the marginal cost of extraction is constant and equal to $200 per unit extracted, and the discount rate (r) is 0:05.
|
Consider the market demand function for coal
: Consider the following market demand function for coal is p t = 200 − 0 . 1 q t . A mining company own a coal mine that has recoverable deposit amount of 2000 tonnes. The firm’s marginal extraction cost is $50 per unit. Assuming only two production p..
|
Explain how to find the equilibrium market interest rate
: Explain how to find the equilibrium market interest rate in an economy where all individuals are alike and there is no government or other assets Explain how to find the equilibrium market interest rate in an economy where all individuals are alike a..
|
How many complete stratagies does cassie have
: To give mom a day of rest, Dad plans to take his two children, Bart and Cassie, on an outing on Sunday. Bart prefers to go to the amusment park (A), whereas Cassie prefers to go to the science musuem (S). Draw the game tree, with payoffs, for the thi..
|
More tax revenue is raised if tax is collected from consumer
: The equilibrium price after a specific tax will be the same whether the tax is collected from consumers or producers. The tax incidence on consumers will be higher if the tax is collected from consumers. More tax revenue is raised if a tax is collect..
|