ABSTRACT
The concept of depletion is not a sudden running out of something but rather a progressive change in the quality of a resource, or in the current costs of producing the resource product. The objective of this chapter shows the fundamental economic theory aids in explaining the course of price and production in situations characterized by depletion. The cases to be considered are simple in that they abstract from a number of complicating factors present in the real world. Specifically, people abstract from the problem of the manner and rapidity with which a profit-maximizing mining firm exploits its mineral deposit. There are numerous estimates of reserves, potential reserves, or potential resources, but such estimates appear to be tied quite closely to the existing stock of knowledge about presently known mineral deposits and therefore should not be viewed as attempts to estimate the complete cumulative distribution by grade.
