Sawmills use logs purchased from tree farmers to manufacture lumber used to build houses. An article in
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Sawmills use logs purchased from tree farmers to manufacture lumber used to build houses. An article in the Wall Street Journal discussed why tree farmers weren’t benefiting from high lumber prices: “Timber growers across the U.S. South, where much of the nation’s logs are harvested, have gained nothing from the run-up in prices for finished lumber. It is the region’s sawmills . . . that are harvesting the profits.” Use a demand and supply graph of the market for logs to explain how it is possible that despite strong demand for lumber to be used in housing, tree farmers were only receiving low prices for the logs they sold to sawmills.
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