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Economic factors in the optimal depletion of resources
|Title:||Economic factors in the optimal depletion of resources|
|Authors:||Peterson, Richard E.|
|LC Subject Headings:||Diminishing returns|
|Issue Date:||Mar 1975|
|Publisher:||Hawaii Geothermal Project, University of Hawaii|
|Citation:||Peterson RE. 1975. Economic Factors in the Optimal Depletion of Resources. Honolulu (HI): Hawaii Geothermal Project, University of Hawaii.|
|Abstract:||Both replenishable and nonreplenishable resources are exhaustible|
and even finite nonreplaceable resources can have infinite economic
lives. The concept of ecological equilibrium) in which total
recruitment of new mass is equal to the harvest rate) is relevant
to both types of resources. The rate of use of existing stock is
the intensive margin and investment in renewal through exploration
and development represents the extensive margin. Both the rate
and level of recovery are influenced by the economic motivation
of the resource owner to maximize the present value of the resource.
Unlike other branches of economics in which current production is
pushed to the point where marginal profits are zero) it is shown
that the profit-maximizing resource owner will postpone the
current production of an additional unit if the present value of
the profit which that unit could earn at some future date is larger
than the marginal profit which can be earned today.
|Description:||Has 19 leaves. Bibliography: leaves 18-19.|
|Appears in Collections:||The Geothermal Collection|
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