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THE EXPLORATION AND PRODUCTION OF A LONG‐LIVED NATURAL RESOURCE (*)
Author(s) -
Stewart Marion B.
Publication year - 1979
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.1979.tb00246.x
Subject(s) - monopoly , natural resource , economics , resource (disambiguation) , natural monopoly , stock (firearms) , production (economics) , industrial organization , microeconomics , natural resource economics , computer science , engineering , mechanical engineering , computer network , ecology , biology
This paper, a synthesis of previous work by the author, examines both the exploration and the production decisions of a firm in a durable natural resource industry, and finds that monopoly power leads to a slowing in the rate of extraction and a reduction in the exploration rate. Thus in a durable resource industry such as gold, the effect of monopoly is multi‐plied: less of the resource will be « discovered », and the stock of the re‐source will be extracted more slowly so that early‐period prices may be kept above the competitive level.