Exploitation of Many Resource Deposits with Set-up Costs

John Hartwick

Working Paper from Economics Department, Queen's University

Abstract: Characterization of cost-minimizing extraction programs from many deposits of an exhaustible resource to meet exogenously given demand is pursued. The role of set-up costs is focussed upon since such types of costs appear pervasive in some sectors of resource extraction. Weitzman (1975) analyzed such programs for generally declining costs but demand constant per unit time. His analysis does not carry over to cases to varying demands. We restrict costs somewhat and let demand vary quite generally. Extraction costs for a deposits have a fixed component and a non-decreasing variable cost per ton.

Pages: 32
Date: 1977
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Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:282

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