The figure given below represents an imperfectly competitive resource market. Here common land (and not land used for specific purpose) is under consideration.Figure 18.1

-In the market for both renewable and nonrenewable resources, the timing of the use of resources depends on:

Question

The figure given below represents an imperfectly competitive resource market. Here common land (and not land used for specific purpose) is under consideration.Figure 18.1
 
-In the market for both renewable and nonrenewable resources, the timing of the use of resources depends on:

Quizplus · Accepted Answer

The timing of the use of resources depends on the market rate of interest because the higher the rate of interest, the greater the incentive to postpone the use of nonrenewable resources, as the returns from their future use would be greater. This is also why renewable resources are used immediately, as their future returns are lower due to their renewability. Alternatives uses, availability of substitutes, elasticity of demand, and government regulations can all have an impact on the usage and pricing of resources, but they do not directly determine the timing of their use.

The Figure Given Below Represents an Imperfectly Competitive Resource Market