According to economic theory, under perfect competition, the price of a depletable resource whose costs of transportation and extraction are negligible
A)is a poor indicator of scarcity.
B)must rise at the rate of interest.
C)will be unable to change to avert running out of it.
D)is too erratic to allow markets to respond to shortages.

Question

Quizplus · Accepted Answer

Under perfect competition, the price of a depletable resource should rise at the rate of interest to reflect its increasing scarcity over time, ensuring that the resource is allocated efficiently across different time periods.

According to Economic Theory, Under Perfect Competition, the Price of a Depletable