Suppose a fossil fuel has stable demand and a constant marginal cost. There are only two periods. MB = 8 – 0.4q; and MC = 2. Suppose there are only 20 units of the resource and the discount rate is r = 0.10. Solve for the dynamic optimum across periods. Show your mathematical solution, but also depict it graphically (ACCURACY COUNTS) using the double-vertical axes model from class. %3D %3D

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Suppose a fossil fuel has stable demand and a constant marginal cost. There
2. Suppose there are only 20 units of
0.10. Solve for the dynamic optimum across
periods. Show your mathematical solution, but also depict it graphically (ACCURACY
are only two periods. MB = 8 – 0.4q; and MC
the resource and the discount rate is r
COUNTS) using the double-vertical axes model from class.
Transcribed Image Text:Suppose a fossil fuel has stable demand and a constant marginal cost. There 2. Suppose there are only 20 units of 0.10. Solve for the dynamic optimum across periods. Show your mathematical solution, but also depict it graphically (ACCURACY are only two periods. MB = 8 – 0.4q; and MC the resource and the discount rate is r COUNTS) using the double-vertical axes model from class.
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