The optimal extraction level in the present for a nonrenewable resource is

Question

Quizplus · Accepted Answer

The optimal extraction level for a nonrenewable resource is where the market price of the resource equals the extraction cost of the last unit plus the user cost of the last unit. This ensures that the resource is being used efficiently, taking into account both the current economic benefits and the potential future costs of using up the resource. Choosing any other extraction level could result in either underutilization or overuse of the resource, leading to inefficient allocation of resources in the economy.

The Optimal Extraction Level in the Present for a Nonrenewable