ABSTRACT
This paper represents an attempt to extend that body of theory referred to in the literature as the “Economic Theory of Exhaustible Resources.” An analytical model is presented that describes the optimal time-path of production for a decision-making unit exploiting an exhaustible natural resource under two differing sets of assumptions vis-a-vis conditions of resource-supply. In Case 1, centralized management of production from a common property resource is considered [14]. In Case 2, the decision-making unit is the firm, which is assumed to be the sole owner of a given resource-stock as in the theory of the mine [2], [6], [9], [13].
