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Monopoly extraction of an exhaustible resource with two markets
Author(s) -
Fischer Carolyn,
Laxminarayan Ramanan
Publication year - 2004
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/j.0008-4085.2004.009_1.x
Subject(s) - monopoly , notice , arbitrage , microeconomics , economics , resource (disambiguation) , natural resource , social planner , planner , industrial organization , business , financial economics , computer science , ecology , computer network , political science , law , biology , programming language
. Although much has been written about monopoly extraction of natural resources, the case of a resource being sold in two separate markets has escaped notice. We find that a monopolist facing two different iso‐elastic demand schedules extracts more rapidly than the social planner, whether or not arbitrage prevents price discrimination between markets. JEL classification: D42, Q3