Neo-Malthusian theory can be used to explain which of the following situations?

• A. A market where prices are determined solely by supply and demand.
• B. A government implementing price controls to stabilize the economy.
• C. A firm achieving economies of scale as it increases production.
• D. A country experiencing rapid population growth that leads to resource depletion and environmental degradation.

Answer: (D)

Verified step by step guidance

1. Understand the Neo-Malthusian theory: It is an extension of the original Malthusian theory, which emphasizes that rapid population growth can outpace the availability of resources, leading to scarcity and environmental degradation.
2. Identify the key elements of the theory: rapid population growth, limited resources, and negative consequences such as resource depletion and environmental harm.
3. Analyze each option in the problem to see which one aligns with these key elements.
4. Recognize that a market where prices are determined solely by supply and demand relates to basic market equilibrium, not Neo-Malthusian concerns.
5. Conclude that the situation describing a country experiencing rapid population growth leading to resource depletion and environmental degradation best fits the Neo-Malthusian theory.