Asked by Talmeez Mohammed on May 28, 2024

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If resource extraction companies can benefit from both present and future extraction, they will limit current extraction to only those units which are more profitable to extract in the present rather than in the future.

Resource Extraction

The process of obtaining natural resources from the Earth, such as minerals, oil, and gas, for human use.

Present

Current time or the moment that is happening now.

Future Extraction

Strategic planning for the removal or usage of natural resources, regarding supply and demand, technological advancements, and environmental impacts.

  • Understand the economic justification for the conservation and management of the environment.
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FE
Farouk ElabbassiMay 28, 2024
Final Answer :
True
Explanation :
Resource extraction companies often engage in intertemporal decision-making, balancing the profitability of extracting resources now versus in the future. By limiting current extraction to units more profitable to extract presently, they can maximize their overall profits while ensuring sustainable resource availability for future extraction opportunities. This approach aligns with the economic principle of maximizing net present value, taking into account the time value of money and the potential for resource depletion or price changes.