Assume that the oil extraction company needs to extract Q units of oil (a depletable resource) reserve in a dynamically

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Assume that the oil extraction company needs to extract Q units of oil (a depletable resource) reserve in a dynamically

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Assume That The Oil Extraction Company Needs To Extract Q Units Of Oil A Depletable Resource Reserve In A Dynamically 1
Assume That The Oil Extraction Company Needs To Extract Q Units Of Oil A Depletable Resource Reserve In A Dynamically 1 (44.69 KiB) Viewed 57 times
Assume that the oil extraction company needs to extract Q units of oil (a depletable resource) reserve in a dynamically efficient manner. What should be a minimum amount of Q so that the oil reserve extraction can last for at least 7 periods if (a) the marginal willingness to pay for oil in each period is given by P = 23 - 0.2q, (b) marginal cost of extraction is constant at $2 per unit, and (c) discount rate is 1%?
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