Abstract
This paper develops a dynamic model in which the marginal cost of production utilizing inexhaustible natural resources exceeds the marginal cost of production using any kind of exhaustible natural resources. The production capacity of the facility utilizing inexhaustible natural resources is finite in this model. We point out that–under certain assumptions–it is worth utilizing the more expensive inexhaustible natural resources strictly before the depletion of exhaustible natural resources, even if the objective of the decision-maker company is to maximize its market value.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.