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

-Extraction of petroleum in the current period will shift the supply curve of petroleum outward in the future resulting in a fall in price of petroleum.

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
 
-Extraction of petroleum in the current period will shift the supply curve of petroleum outward in the future resulting in a fall in price of petroleum.

Quizplus · Accepted Answer

Extraction of petroleum in the current period reduces the available reserves, potentially leading to a decrease in future supply, which could increase prices, not decrease them.

The Figure Given Below Represents an Imperfectly Competitive Resource Market