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Consider a competitive industry extracting a nonrenewable recourse. The discount rate is 10 percent. The price for the resource in period t is $10 per

Consider a competitive industry extracting a nonrenewable recourse. The discount rate is 10 percent. The price for the resource in period t is $10 per unit. The marginal extraction cost is $5 per unit and does not change over time. What will the price be for the resource in period t+1? (hint: Think Hotelling's rule!!!)

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