Calculate period 1 and period 2 consumption of natural gas

Reference no: EM13189241

Imagine a scenario where people have 2 periods in which to live, but a limited supply of natural gas to consume (assume that no natural gas will be created in the future). Assume the demand for cubic feet of natural gas is given by the equation, P=350-5Q, the extraction of natural gas has a constant marginal cost of $50 per cubic foot (MC = $50) and the discount rate is 8%.

A. Calculate the Period 1 and Period 2 consumption of natural gas (in cubic feet) that maximizes the present value of total net benefits if there are only 120 cubic feet of natural gas available.

Reference no: EM13189241

Questions Cloud

What are the pros and cons of each of these methods : Quadratic equations may be solved by graphing, using quadratic formula,completing the square, and factoring. What are the pros and cons of each of these methods? When might each method be most appropriate? Which method do you prefer? Explain why?

What is the opportunity cost of holding a job : Define unemployment. Should everyone who does not hold a job be considered "unemployed" To help with your answer, draw a supply and demand diagram depicting the labor market. What is measured along the demand curve

Yellow stone of yellowstone national park : The "yellow stone" of Yellowstone national park is sulfur-and iron oxide-stained consolidated volcanic ahs(tuff).

Volcanic danger assessment maps : Volcanic danger assessment maps are valuable tools in protecting human life when volcanic eruption threatens. It is not possible to divert lava flows because they'are too hot and powerful.

Calculate period 1 and period 2 consumption of natural gas : a limited supply of natural gas to consume (assume that no natural gas will be created in the future). Assume the demand for cubic feet of natural gas is given by the equation, P=350-5Q, the extraction of natural gas has a constant marginal cost o..

What are the annual holding costs for the wokbooks : What are the annual holding costs for the wokbooks?

Determine the average life of supplier bs tires : A purchasing agent for a trucking company is shopping for replacement tires for their trucks from two suppliers. The suppliers' prices are the same. However, Supplier A's tires have an average life of 60,000 miles with a standard deviation of 10,0..

How much will it drop by the time it reaches the catcher : A major league pitcher can throw a baseball in excess of 48.8 m/s. if a ball is thrown horizontally at this speed, how much will it drop by the time it reaches the catcher who is 15.7 m away from the point of release?

Adam makes a written offer to ben to sell a car : Adam makes a written offer to ben to sell a car for $5000 and a radio for $200.he stipulaes that the offer must be responded to 1 july 2011.on the receipt of the offer ,ben telephones adam,found him absent and leaves a massage that he could pay only ..

User Account

All Pages