Compute the dynamically efficient production plan

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Reference no: EM131424605

Consider the following market demand function for coal is pt = 200 - 0.1qt: A mining company own a coal mine that has recoverable deposit amount of 2000 tonnes. The firm’s marginal extraction cost is $50 per unit. Assuming only two production periods, a discount rate of 10%, and a perfectly competitive coal market

(a) compute the dynamically efficient production plan

(b) calculate first year and second year prices.

Reference no: EM131424605

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