Profit-maximizing extraction companies will attempt to

Question

Quizplus · Accepted Answer

Profit-maximizing extraction companies will want to extract resources at a rate that maximizes profits over time. This means that they will need to balance the cost of extraction, resource availability, and market demand to find the optimal extraction rate. Simply extracting resources as quickly as possible (choice A) might lead to short-term gains, but would ultimately deplete the resource faster and could lead to long-term losses. Delaying extraction as long as possible (choice B) might also result in lost profits if market demand changes or if a competitor brings a similar resource to market first. Extracting resources at a constant rate every year (choice D) might not be the most profitable strategy if market demand changes or if the resource becomes more or less expensive to extract over time. Therefore, the best choice is C: find rates of extraction that maximize the flow of profits over time.

Profit-Maximizing Extraction Companies Will Attempt to