Top Posters
Since Sunday
s
3
v
3
p
3
m
2
s
2
d
2
N
2
d
2
e
2
s
2
s
2
e
2
Home Q & A Board Other Fields Homework Help Business Economics
New Topic  
nakungth nakungth
wrote...
Go to Answer
Posts: 1175
Rep: 3 0
6 years ago
Assume that you own an exhaustible resource that is sold competitively.  The price of the resource is:
   Pt + 1 - C = 1.08(Pt - C),       
where t = 0 at the beginning of 2005, P = price in dollars per ton, and C = marginal cost of extraction (fixed over time).  It is also known that the demand for the resource is:
   Q = 1,000,000 - 25,000 P,       
where Q represents output in tons per year.  If the beginning of 2005 price is $30 per ton and the marginal cost of extraction is $10 per ton, what will the price be at the end of 2009?  What is the user cost of production in 2009?  Is it different from the user cost for 2005?  Explain.  How much of the resource will be extracted in 2009?  What is the market rate of interest on money?  Explain.
Textbook 
Microeconomics

Microeconomics


Edition: 8th
Author:
Read 57 times
2 Replies
Replies
Answer verified by a subject expert
CanihCanih
wrote...
#1
Posts: 463
Rep: 13 0
6 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
This verified answer contains over 240 words.
1

Related Topics

nakungth Author
wrote...
#2
6 years ago
A+ answer, ty
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  1299 People Browsing
 148 Signed Up Today
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 285
  
 295
  
 15615
Your Opinion
Which industry do you think artificial intelligence (AI) will impact the most?
Votes: 484
Previous poll results: Should Ph.D.'s be addressed as doctors?