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The market for copper, a nonrenewable resource, is characterized by the following:
Demand: P = 200 - 4QSupply: P = 80 + 2Q
Totalavailableamount: 30. i.e Q1 + Q2 = 30
a) What is the market equilibrium price and quantity if there is a single period? What is the MNB equation?
b) Now consider the two period model.If the discount rate is zero, what is the priceand quantity of the good in both periods?
c) If the discount rate is 7% what is the price and quantity of the good in both periods?
d) Draw a graph that shows the MNB curve in both time periods from part c and theallocation in both periods
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