Figure 13.10 An Explanation for Falling Resource Prices Demand for resources has increased over time from D1 to D2, but this shift in demand is less than it would have been (D3) if technologies for producing goods and services using less resource per unit of output had not been developed Supply of resources has increased from S1 to S2 as a result of the discovery of deposits of natural resources and/or development of new technologies for extracting and refining resources As a result, the prices of many natural resources have fallen Will we ever run out of exhaustible natural resources? Past experience suggests that we will not If no new technologies or discoveries that reduce demand or increase supply occur, then resource prices will rise As they rise, consumers of these resources will demand lower quantities of these resources Eventually, the price of a particular resource could rise so high that the quantity demanded would fall to zero At that point, no more of the resource would be used There would still be some of the resource in the earth—it simply would not be practical to use more of it The market simply will not allow us to “run out” of exhaustible natural resources Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 717