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

-If the rate of extraction of a renewable resource is greater than its rate of replenishment, the price of the resource is likely to fall in future.

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
 
-If the rate of extraction of a renewable resource is greater than its rate of replenishment, the price of the resource is likely to fall in future.

Quizplus · Accepted Answer

If the rate of extraction of a renewable resource exceeds its rate of replenishment, it leads to scarcity, which typically increases the price due to higher demand and lower availability.

The Figure Given Below Represents an Imperfectly Competitive Resource Market