Economic Behaviour of a Wood Producing Firm

Abstract

A model has been developed for a firm managing a woodlot for commercial purposes in a competitive market. The determination of optimal rotation age for the forest crop is found to be the most important economic decision to be taken by the wood producing firm. Increase in the price of wood or the rate of discount tends to lower the optimal rotation while an increase in the cost of regenration tends to lengtben it. The model is tested by employing yieJd data for a Eucalypts plantation.