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

-The markets for renewable and nonrenewable resources operate to ensure that:

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
 
-The markets for renewable and nonrenewable resources operate to ensure that:

Quizplus · Accepted Answer

In a perfectly competitive resource market, the price of the resource would be equal to the marginal cost of producing it. However, in an imperfectly competitive resource market, the price will be higher than the marginal cost, leading to profits for the producers. This can lead to excessive use of the resource and inefficiencies in allocation. The market should operate to satisfy the current and future wants for the resource in the least costly manner, which would involve pricing closer to marginal cost and promoting efficient use and conservation of the resource.

The Figure Given Below Represents an Imperfectly Competitive Resource Market