Forestry economics have been estimating various elasticities for wood for years.

Question

Forestry economics have been estimating various elasticities for wood for years. They have found the following:softwood short run demands are very inelastic; the long run cross-price elasticity of BC softwoods, with softwoods from other parts of the world is quite high;as the long run cross price elasticity of softwoods with other woods is positive, but not as high. a) Do these make sense? b) BC and the Pacific Northwest happen to be very productive in producing high quality timber (old growth, clear wood). Not only this, but our forests arre generally at regenerating themselves than many other forests (especially tropical ones) around the world. Given this, and the elasticities mentioned above, what happens to the price, to the supply of wood, by other countries, and to the amount of wood cut down elsewhere? c) In what sense are the "friends of Clayquat Sound" (a large tract of forest on Vancouver Island that is now protected form logging) also tge "enemies if te Amazon rain forest"? please answer questions in as much detail as possible, thank you :)

Explanation / Answer

Yeah ..,Price elasticity of demand = Proportion change in demand / Proportion change in price ; ...if in short run- demand is very inelastic this means if we change the price ( considering increase or decrease) then change in demand is not enough (or not noticable) . But this is the case for Overall product in this case it is softwood...... And the fact that cross-price elasticity of BC softwoods is quite high means if change in price is caused of BC Woods then definitely the prices of other woods would also change . And it being positive means if BC softwoods' price increases so other woods' price also will increase and vice versa .

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