Solve the following storage problem under perfect
Solve the following storage problem under perfect competition. Provide the prices and quantities in each period with optimal storage and compare the net present value to a no storage scenario (use a discount rate of r = 0.05).
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Suppose a firm’s input of capital is fixed at K = 5 . The cost of capital is r = 2. Derive the formulas for and plot the AFC, MC, AVC, and SAC curves if the short run total cost function is:
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