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In addition, there is capacity constraint on extraction in each mine.
In the present model, the costs of 'producing' resources are always constant, and there exists capacity constraint on extraction in each resource mine.
There exists a capacity constraint on extraction in each mine, which is represented here by the corresponding element of (varvec{h}).
(R3) There exists a capacity constraint on extraction in each mine, which is represented here by the corresponding element of (varvec{h}).
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Let a vector (varvec{h}) serve as the capacity constraints on extraction, whose elements represent the maximum amount of resources that can be extracted at any given time.2 Finally, the initial amounts of resources and commodities are known and given as (bar{varvec{z}}) and (varvec{v}), respectively.3.3
In this model, there are both resource-searching activities and capacity constraints on extraction.
In their model, the capacity constraints on extraction are represented by the following inequalities.
(H2) There exist no capacity constraints on extraction: (varvec{h}) is close to infinity.
There exist no capacity constraints on extraction: (varvec{h}) is close to infinity.
To simplify analysis, it is assumed in this study that the capacity constraints on extraction are given and constant.
The formalisation of capacity constraints on extraction in this model is slightly different from the model found in the work of Kurz and Salvadori (2009, 2011).
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