Competitive behavior in an extractive industry with increasing
marginal costs of production will generate a socially efficient pattern
of production over time. The Weinstein-Zeckhauser analysis of this
result assumed that marginal extraction costs at a mine depend only
on the amount extracted from the mine to date. This note clarifies the
original Weinstein-Zeckhauser proof and goes on to consider more
explicitly what happens when extraction costs depend not only on the
amount extracted at each site, but also on the firm doing the extraction.