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

-Unlike nonrenewable resources, the timing of extraction of renewable resources are independent of the market rate of interest.

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
 
-Unlike nonrenewable resources, the timing of extraction of renewable resources are independent of the market rate of interest.

Quizplus · Accepted Answer

The timing of extraction of renewable resources can be influenced by the market rate of interest because the rate of interest affects the cost of capital and the opportunity cost of investing in the extraction and management of these resources. Higher interest rates can make it more expensive to invest in renewable resources, potentially delaying their extraction or development.

The Figure Given Below Represents an Imperfectly Competitive Resource Market