Carleton University Identification of the Optimal Rotation Period Questions

I’m working on a economics discussion question and need support to help me understand better.

4. The condition for optimizing the management of a forest is given by: ??? = ??????(??) ? ???? + ???? [1] Equation [1] can also be expressed as: ??? ??(??)???+?? = ?? [2]

a. [5 marks] Explain clearly the meaning of equation [1]. b. [5 marks] Explain clearly the meaning of equation [2]. c. [4 marks] Explain with the aid of a well-labelled diagram how an increase in the discount rate will affect the optimal rotation period. d. [4 marks] Explain with the aid of a well-labelled diagram how an increase in the cost of harvesting a forest will affect the optimal rotation period. e. [4 marks] Explain with the aid of a well-labelled diagram how an increase in the price of timber will affect the optimal rotation period. f. [4 marks] Explain with the aid of a well-labelled diagram how the presence of positive externalities will affect the optimal rotation period.

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