Discuss the condition under which a mining firm can realise maximum present value of its rent' while extracting with constant marginal cost
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As we know the mining firms contribute a large part for the development of a country and also applicable of generating rent with constant marginal cost.
Explanation:
- The mining firm can get maximum rent because the resources are scarce in nature and the mining firm can get good economic return.
- Various cost are incurred such as investment of capital, labor cost,input cost, opportunity cost and as a result the mining firms require proper return for the cost.
- From economic point of view proper equitable management of scarce resources helps in gaining maximum value with constant marginal cost.
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