Question

Define and explain when the presence of a backstop competitive supplier leaves Hotelling industry extraction largely unchanged... and when such a backstop changes Hotelling industry extraction considerably

Answer 1

DEF : backstop technology is a sustainable natural resource substitute in place of resource which will be exhausted.

using backstop technology the average cost of producing a substitute decreases.

backstop changes hoteling industry extraction because resource price and extraction was not threatened by backstop and became as a benchmark.

By incorporating organization will look into the future when preparing a strategic plan , the effects of the backstop technology on the exhaustible resource’s price and extraction were analysed.