Abstract
In the previous chapter we identified the optimal harvest of a renewable resource. Let us assume now that we are the owners of a nonrenewable resource such as a mineral in a mine. As the mine owners, we attempt to maximize the present value of profits that accrue from selling the mining output. Again, we assume perfect competition, i.e., at each period of time the price of the mineral is a given. Let us also assume that there are no substitutes for the mineral and that it cannot be recycled. Furthermore, for the simplicity of the model we assume that the resource stock is known and that there are no new discoveries.
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© 1994 Springer-Verlag New York, Inc.
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Hannon, B., Ruth, M. (1994). Competitive Scarcity. In: Dynamic Modeling. Springer, New York, NY. https://doi.org/10.1007/978-1-4684-0224-7_28
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DOI: https://doi.org/10.1007/978-1-4684-0224-7_28
Publisher Name: Springer, New York, NY
Print ISBN: 978-1-4684-0226-1
Online ISBN: 978-1-4684-0224-7
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