Problem
Answer the following questions and briefly explain your reasoning:
1. List 3 factors that may affect the formation and sustainability of a cartel. In what ways would these factors impact the market for a depletable resource?
2. List 2 factors that are relevant to determine why the real world prices of some exhaustible resources (e.g., oil, gas) may deviate from the Hotelling rule. How would these factors affect the prices?
3. If a conservationist would like to delay the date of exhaustion of a depletable resource, would she prefer a perfectly competitive or monopoly industry facing the same demand curve.