The authors claim that monopolists will tend to practice stronger conservation of depletable resources than would occur under a perfectly competitive market structure. Why is this true?

Question

Quizplus · Accepted Answer

Monopolists tend to generate lower output levels than under perfect competition, so the resource is depleted at a slower rate by the monopolist. This is because a monopolist can charge a higher price for their product, so they don't need to extract as much of the resource to make a profit. The conservation of the resource serves as a long-term strategy for the monopolist to maintain their market power and profitability.

The Authors Claim That Monopolists Will Tend to Practice Stronger