Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I'm struggling to calculate these practice questions could you help? The demand function for a product using resource X is given by MB = 500-10Q

I'm struggling to calculate these practice questions could you help?

The demand function for a product using resource X is given byMB = 500-10Q, which is constant over time and the cost of production is constant atMC = 100.

a. Find the static equilibrium for this product in a single time period (call this t0).

b. Write the function for Marginal Net Benefit (MNB).

c. Suppose that there is a limited stock amount of 70 units can be consumed in two time periods t0 and t1. Assume that the current generation (those consuming in t0) pays no regard at all to the consumption in t1. How much is left to consume in t1?

d. Suppose the discount rate is 10%. What is the dynamically efficient consumption/production in t0? What is the dynamically efficient consumption/production in t1?

e. How does discount rate affect the allocation of resources across different generations?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Probability And Statistical Inference

Authors: Robert V. Hogg, Elliot Tanis, Dale Zimmerman

9th Edition

321923278, 978-0321923271

Students also viewed these Economics questions