A Dad and his Son go mining ..... once more

This is a heart-warming story from the BBC about the rebirth of Hatfield Main colliery which is back in action once more, coal-mining having been made economically viable by the soaring world price of coal.

Hatfield Main is now operating under the orbit of PowerFuel owned and managed by Richard Budge, formerly of RJB mining which took over the remmnants of the deep mine coal industry after the rash of pit closures in the early to mid 1990s.

It is a good video clip to use when discussing the costs of coal extraction - I used it this morning when discussing the concept of marginal cost with my A2 economic students.

We contrasted the marginal cost of bringing another tonne of coal to the surface with the marginal production costs facing Apple as it launches the latest version of the iPod Nano. In both cases the private costs of expanding supply are positive - but the ratio of fixed to marginal costs looks (on the surface) to be very different.

This led us on to discuss the virtually zero marginal cost of supplying extra units of digital products such a music download on iTunes or an extra user joining Facebook or MySpace. The trend line in marginal production costs for many of these ‘weightless’ products seems to be on a path towards zero. And Chris Anderson’s new book (he of the Long Tail theory) is due out early next year and might prove to be a handy and useful addition to student reading lists. Here is a recent piece of his from Wired magazine.

Here is Chris Anderson on EconLog