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Economic Theory: Exploring the Marginal Concept Expository Essay

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Updated: Jul 30th, 2019

Circumstances Encouraging Businesses to Open Up Coal Minds and Exploiting These Resources

The coal industry in Europe has recently been closed because the revenues received from coal mining did not justify the costs needed to sustain the production. Specific problems are connected with impossibility to meet environmental standards, as well as development of green economy (Kanter n. p.).

The business engaged with coal mining should be more concerned with these issues to attract investments and introduce new conditions for launching the production (Kanter n. p.). Cost effectiveness of the coal production also influences the pricing policy. In case the prices increase, there is a possibility that consumer demand will decrease (Webster 73).

Environmental factor is an important condition that influences marginal costs and, therefore, the businesses that are planning to open up coal mining should take this factor into consideration (Miller and Spoolman 617; Hirschey 29). Negligence of such aspects as environmental pollution can influence the marginal costs that could exceed the potential benefits received from the production.

With regard to the above-presented deliberations, the three economic principles are closely involved into the production process (Webster 73). In particular, the coal production can be renewed in case the production methods are changed and the target consumers are strictly identified.

Relevance of Marginal Concept to the Destruction of the Rain Forest

Certainly, deforestation has a negative impact on the earth ecosystem due to the decrease in oxygen production, which is essential for sustaining normal existence of flora and fauna on the planet (Ghosg and Choudhury 17). However, there are other factors predetermining deforestation, such as oil production, for which the demand has recently been increased.

The marginal concept implies that availability of reserves can be enormous in case new areas are found for production. Though the reserves are available for extracting, numerous industries resort to deforestation to increase productivity and remain cost-effective (Ghosg and Choudhury 17)

However, the manufactures should take greater responsibility for crude oil production because reserves are not limitless (Rima 226). When all areas are cultivated, no land will be left and, as a result, the productivity can be enhanced by means of introducing new technology.

Understanding of Marginal Concept and Its Impact on Establishing Strategies to Conserve As Opposed To Destroying Natural Resources (Crude Oil)

Product forest certification is among the most innovative strategies to avoid ecological problems. According to Viana et al., “sustainable forestry aims to provide a continuous yield of high-quality forest products while preserving the essential biological and ecological integrity” (238). Thus, changing shift to green economy system can reconsider the crude oil production.

For instance, to ensure environmental safety, the marginal concept should contribute to exploring new ways of production, transportation, and distribution among the population (Steele n. p.). Full transformation of the oil industry is impossible because it will follow to much more serious consequences, including increase in unemployment rates, destruction of economies, and failure of international relations (Fee 19).

Numerous economies have significantly benefited from the crude oil production because they used it for exporting. In fact, further production requires appropriate technologies for refining it into gasoline. However, the refiners have been hampered by the impossibility to proceed with further production because of the environmental hazards (Hrishey 496).

Therefore, most managerial decisions consider changes that are much broader in concext. In order to sustain environmentally safe production, the production should adhere to the marginal concept to build long-term strategies.

Works Cited

Fee, Daniel. Technology for Developing Marginal Offshore Oilfield. US: Taylor & Francis, 1993. Print.

Ghosg, Piyali, and Purba Roy Choudhury. Managerial Economics. US: Tata McGraw-Hill Education, 2008. Print.

Hirschey, Mark. Managerial Economics. US: Cengage Learning, 2008. Print.

Kanter, James. . The New York Times. 2010, Web.

Miller, George Tyler, and Scott Spoolman. Living in the Environment: Principles, Connection, and Solution. US: Cengage Learning, 2008. Print.

Rima, Ingrid. Development of Economic Analysis. US: Taylor & Francis, 2009. Print.

Steele, Henry. The Economic Potentialities of Synthetic Liquid Fuels from Oil Shale. US: Ayer Publishing, 1979. Print.

Truby, Johannes, and Moritz Paulus. Have Prices of International Traded Steam Coal been Marginal Cost Based. Institute of Energy Economics at the University of Cologne. 2010, pp. 2-17. Web.

Viana, Virgilio, Ervin Jamison, Donovan Richards, Elliott Chris, and Henry Gholz. Certification of Forest Products: Issues and Perspectives. US: Island. 2008, Print.

Webster, Thomas. Managerial Economics: Theory and Practice. US: Emerald Group Publishing, 2003. Print.

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