Consider a three-period model of a nonrenewable resource extraction. Lay out the maximization problem, and determine the explicit expression for user cost.

Hint: You should think about what the "change in PV of NBs" would look like when there are 3 periods. You'll have a squared term in the expression, and the user cost will be based on what happens in time 1 as well as time 2.

Expressions to work from: p0-mc0=1/1+r (p1-mc1) User cost: In two time period model it is 1/1+r(p1-mc1)