Let demand be given by Q = 150 - P + 2Y. This is the same for all problems of this type. Let r = 10%. Let Y = 50 across both periods. Let MC = 0. Let reserves = 200. Consider the basic two-period model. What is consumption of the resource in the present IF THE OWNER OF THE RESOURCE IS A MONOPOLIST?
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94.29 |
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98.81 |
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101.19 |
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105.71 |
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none of the above |
Answer option 3)
Q= 150-P+2*50
Q= 250-P, MC= 0, r= .1,
Q1+Q2= 200
As P= 250-Q
MR= 250-2Q
.
so, at MONOPOLY extraction
MR(q1) - MC = [ MR(q2) - MC]/(1+r)
250-2Q1 = (1/1+r )*(250-2Q2)
250-2Q1 = (250-2Q2)/1.1
275- 2.2*Q1 = (250-2*Q2)
Put Q2= 200-Q1
25-2.2*Q1 = 2(Q1-200)
425= 4.2Q1
Q1*=101.19
Let demand be given by Q = 150 - P + 2Y. This is the same for all problems of this type. Let r = 10%. Let Y = 50 across both periods. Let MC = 0. Let reserves = 200. Consider the basic two-period model. What is consumption of the resource in the present IF THE OWNER OF THE RESOURCE IS A MONOPOLIST? 94.29 98.81 101.19 105.71 none of the above
Let demand be given by Q = 150 - P + 2Y. This is the same for all problems of this type. Let r = 10%. Let Y = 50 across both periods. Let MC = 0. Let reserves = 200. Consider the basic two-period model. What is consumption of the resource in the present IF THE OWNER OF THE RESOURCE IS A MONOPOLIST? 94.29 98.81 101.19 105.71 none of the above
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