1. Now assume the following specific demand equation: p = 9 – 0.3q; r = 0.1; R= 80; mc = 2. Suppose the resource price is currently $3 per unit. What is the depletion year for this resource under perfection completion? (Note: you may need to carry out some calculations in a spreadsheet).
2. Given the information provided in question 1,
What is the equation of MR?
What is the specific MR corresponding to the initial point characterized by p = 3?
Compute the optimal depletion year.