If a Depletable Resource Is Selling in a Perfectly Competitive

question 18

True/False

If a depletable resource is selling in a perfectly competitive market, its expected price will continue to fall over time.This makes it unprofitable for firms to seek out the resource and bring it to market.

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Definitions:

Return On Investment

A financial metric used to evaluate the efficiency or profitability of an investment relative to its cost.

Residual Income

The income that remains after all personal debts and expenses have been paid from one's net income.

Minimum Required Rate

The lowest acceptable return on investment required by an investor or manager.

Return On Investment

A measure of the profitability of an investment, calculated as the ratio of net returns to the initial capital cost.