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王敏:Monopoly Extraction of a Nonrenewable Resource Facing Capacity Constrained Renewable Competition



 发布日期:2012-10-18 15:41:00 来源:本站         

CCED工作论文系列                                                                              No.20130303

 

 

CCED Working Paper Series

 

 

 

Monopoly Extraction of a Nonrenewable Resource

 

Facing Capacity Constrained Renewable Competition

 

 

Min Wang and Jinhua Zhao

 

 

Abstract

This paper studies monopoly extraction of a nonrenewable resource with the presence of a competitively supplied renewable substitute. We show that if the renewable substitute has a capacity constraint, the monopolist would keep the price flat for a while to stave off the renewable substitute when the latter becomes competitive. The monopolist would then let the resource price jump up so that the renewable substitute produces at full capacity. The price and quantity paths thus are discontinuous.

 

 

 Monopoly Extraction of a Nonrenewable Resource Facing Capacity Constrained Renewable Competition.pdf