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 supply curve of an exhaustible resource shifts up as the marginal cost of extracting the resource increases.

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 supply curve of an exhaustible resource shifts up as the marginal cost of extracting the resource increases.

Quizplus · Accepted Answer

This statement is true. As the marginal cost of extracting an exhaustible resource increases, it becomes more expensive to extract the resource, thus shifting the supply curve upwards. This is because the resource becomes scarcer and harder to access as it is depleted.

The Figure Given Below Represents an Imperfectly Competitive Resource Market