Question: 23.4 As in Example 23.2, suppose trees are produced by applying one unit of labor at time 0. The value of the wood contained in

23.4 As in Example 23.2, suppose trees are produced by applying one unit of labor at time 0. The value of the wood contained in a tree is given at any time (t) by f(t). If the market wage rate is w and the instantaneous rate is r, what is the PDV of this production process and how should t be chosen to maximize this PDV?

a. If the optimal value of t is denoted by t*, show that the no-pure-profit condition of perfect competition will necessitate that Can you explain the meaning of this expression?

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