Question

1. Explain, with diagrams, why a monopolistic non-renewable energy resource market is biased toward conservation and will therefore increase the life of the energy resource.

Answer 1

Monopolistic players often indulge in conservation of resources since being non renewable and an expectation to charge enormously high margins onto customer for its non renewabilty. Thus they increase life of resource to limit the production and cater to maximum customer base and charge higher margins to boost theor profitability as new entrants cannot match the monopoly players production levels or investment levels and thus monopoly takes an advantage of this situation.