There can not be any doubt in the minds of economists, sociologists, geologists or the general public that the earth does have only a finite amount of mineral resources such as coal and iron. During the past century, the demand of these resources increased over time however the prices of these natural resources have declined or remained roughly constant relative to overall prices. Why the price is not change rapidly?
Note: Your answer must not exceed 50 words.................
Solution:
According to the rule of economics when demand increases price also increases but in this case we can not apply this formula because price is not increasing.because these resources are God gifted.these are increasing with time because with more latest technology and study and research about the hidden area of earth.
price only that time increase when supply decrease. in this case supply is increasing more rapidly than demand. so there is no change in price.
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ECO 402 11 November last date
Market equilibrium (topic)
There can not be any doubt in the minds of economists, sociologists, geologists or the general public that the earth does have only a finite amount of mineral resources such as
coal and iron. During the past century, the demand of these resources increased over time however the prices of these natural resources have declined or remained roughly constant relative to overall prices. Why the price is not change rapidly?
Decrease in the cost of production has increased the supply by more than enough due to latest technology use now days. That is why the price of coal and iron is unchanged
or constant over the period of time. Second factor is their substitute like Furnas oil and natural gas for coal and for the iron new trend has developed by using plastic in
production like in automobile industry.
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