When a resource is being depleted and becomes scarce, the market's way of encouraging conservation is for the price of the resource to rise, without any government intervention.

Question

Quizplus · Accepted Answer

This is known as the principle of supply and demand in the market economy, where as the demand for a resource increases and its supply decreases, the price of the resource increases, encouraging people to conserve and use the resource more efficiently. This is a natural outcome in a market economy without any government intervention.

When a Resource Is Being Depleted and Becomes Scarce, the Market's