QUESTION A) Compute the optimal number of tons of bastnasite to extract in each period.

B) What will the price of bastnasite be in period 1 at the optimal dynamic allocation?

C) Use results from your calculation to show what happens to the price of bastnasite over time.

D) How would a higher discount rate affect the optimal allocation across periods? Explain your reasoning.

Question #1 Dynamic Efficiency Suppose a limited amount of bastnsite 2 is available to allocate across two periods, two years apart. The dynamic efficiency problem is represented by: Marginal benefit (WTP) in period 1= WTP in period 2=127512Qd Marginal Extraction Cost (MEC)=65 (constant across periods) Total tons of bastnsite =145 Discount rate =0.15 For the computations, explain your process, show your work, and round your answers to two decimal places. Question #1 Dynamic Efficiency Suppose a limited amount of bastnsite 2 is available to allocate across two periods, two years apart. The dynamic efficiency problem is represented by: Marginal benefit (WTP) in period 1= WTP in period 2=127512Qd Marginal Extraction Cost (MEC)=65 (constant across periods) Total tons of bastnsite =145 Discount rate =0.15 For the computations, explain your process, show your work, and round your answers to two decimal places