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A Model of Resource Depletion with Multiple Grades *
Author(s) -
ULPH ALISTAIR M.
Publication year - 1978
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1978.tb01635.x
Subject(s) - economic rent , extension (predicate logic) , simple (philosophy) , resource (disambiguation) , resource depletion , overhead (engineering) , computer science , mathematical economics , mathematical optimization , econometrics , economics , mathematics , microeconomics , programming language , ecology , computer network , philosophy , epistemology , biology
The standard extension of the Hotelling model of resource depletion to consider multiple grades leads to sequential development of successively poorer grades. However, this is not what is observed, and this paper formalises one reason for simultaneous exploitation—the existence of overhead costs in the preparation of a mine. It is shown that the structure of rents which is obtained in the simple model of multiple grades still applies in this more complex situation.