Suppose the mwtp in periods 1 now and 2 one year from now


Suppose the MWTP in periods 1 (now) and 2 (one year from now) is given by P = 8-0.4q. Marginal extraction cost = $2. r = 20%. The available supply is 20 units. Calculate the allocation of outputs across the two periods that maximizes the present value of the net benefits for the use of the resources. Draw your answer on a graph.

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Business Economics: Suppose the mwtp in periods 1 now and 2 one year from now
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