Please answer question 4

4. The condition for optimizing the management of a forest is given by: AV = r[V(T) C] +rs [1] Equation (1) can also be expressed as: [2] V(T)-c+s = r 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. 4. The condition for optimizing the management of a forest is given by: AV = r[V(T) C] +rs [1] Equation (1) can also be expressed as: [2] V(T)-c+s = r 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