Compute the efficient price for the two periods

Reference no: EM13686690

In the numerical example given in the text, the inverse demand function for the delectable resource is P = 8 - 0.4q and the marginal cost of supplying it is $4. (a) If 40 units are to be allocated among two periods, in a dynamic efficient allocation, decide how much would be allocated to the first period and how much to the second when the discount rate is zero. (b) Compute the efficient price for the two periods. (c) Compute the marginal user cost in each period.

Reference no: EM13686690

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