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[See Solution] In the numerical example in the class, the inverse demand function for the depletable resource was p=9-0.6 q and the marginal extraction cost

Question: In the numerical example in the class, the inverse demand function for the depletable resource was \(p=9-0.6 q\) and the marginal extraction cost was $3.

  1. If 15 units are to be allocated between two periods, in a dynamic efficient allocation how much would be allocated to the first period and how much to the second period when the discount rate is zero?
  2. What would be the efficient price in the two-period model?
  3. What would be the marginal user cost in each period?

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