Suppose the marginal extraction cost in the period 1 is expected to fall to C' per unit extracted where C'

Optimal extraction over two periods In this question, we consider the optimal extraction of a non-renewable resource (oil) over two years (year 0 and year 1). Demand is given by: Pt = o [3 qt, where Pt is the price in period tand qt is the quantity in year t. Extraction costs are constant at $0 per unit. Assume the discount rate is r=5/o. In your calculations below, indicate prices and quantities to two decimal points. Question 7 (3 points) e. Suppose the marginal extraction cost in the period 1 is expected to fall to C' per unit extracted where C'