The price of a nonrenewable resource is expected to rise at a rate equal to the
A) rate of demand.
B) rate of population growth.
C) rate of supply.
D) interest rate.

Question

Quizplus · Accepted Answer

The price of a nonrenewable resource is expected to rise at a rate equal to the interest rate. This is because the resource is finite, and as it becomes scarcer, its price must increase at a rate that makes it indifferent for owners to sell the resource now or keep it for the future, aligning with the concept of the Hotelling Rule in economics.

The Price of a Nonrenewable Resource Is Expected to Rise