Suppose we have the following data   Demand in period 0: PO = 10 - Q0   Demand in period 1: PO = 10 - QI   In situ stock size = 6   MC of extraction = 2   interest rate = 0   What is the optimal price in period 1 according to the dynamically efficient allocation?   A. 4   B. 8   C. 7   D. 10

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Please give correct typed step by step proper explanation of the each option given . Will give you thumbs up only for the correct answer. Thank you .

 

Suppose we have the following data

 

Demand in period 0: PO = 10 - Q0

 

Demand in period 1: PO = 10 - QI

 

In situ stock size = 6

 

MC of extraction = 2

 

interest rate = 0

 

What is the optimal price in period 1 according to the dynamically efficient allocation?

 

A. 4

 

B. 8

 

C. 7

 

D. 10

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