9 QUESTION 9Assume that the oil extraction company needs to extract Q units of oil (a depletable resource) reserve in a dynamically efficient manner. Whatshould be a minimum amount of Q so that the oil reserve extraction can last for at least 10 periods if (a) the marginal willingness to pay for oil ineach period is given by P 20-0.2q, (b) marginal cost of extraction is constant at $3 per unit, and (c) discount rate is 2 %?22

P=20-0.2q MC=$ 3 Discount rate= 2%

Assume that the oil extraction company needs to extract Q units of oil (a depletable resource) reserve in a dynamically efficient manner. What should be a minimum amount of a so that the oil reserve extraction can last for at least 10 periods if (a) the marginal willingness to pay for oil in each period is given by P20-0.2q, (b) marginal cost of extraction is constant at $3 per unit, and (c) discount rate is 2 %? 22

Assume that the oil extraction company needs to extract Q units of oil (a depletable resource) reserve in a dynamically efficient manner. What should be a minimum amount of a so that the oil reserve extraction can last for at least 10 periods if (a) the marginal willingness to pay for oil in each period is given by P20-0.2q, (b) marginal cost of extraction is constant at $3 per unit, and (c) discount rate is 2 %? 22

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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