Explain the Hotelling condition for the optimal depletion of exhaustible resources.

The Hotelling condition, also known as Hotelling's rule or the principle of exhaustible resource management, is an economic concept that provides insights into the optimal depletion of exhaustible resources over time. It was developed by Harold Hotelling, an economist, in the 1930s. The Hotelling condition highlights the interplay between the scarcity of the resource, its market price, and the rate of extraction.

The Hotelling condition can be summarized as follows:

1. The price of the exhaustible resource should increase over time at a rate equal to the rate of interest in a perfectly competitive market.

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