Deforestation and Marginal Cost - Case Study Example

Comments (0) Cite this document
The writer of this paper "Deforestation and Marginal Cost" aims to examine the most common cost which is obligatory need to be taken into consideration. Furthermore, the paper will look at some of environmental problems related to the deforestation…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER91.1% of users find it useful

Extract of sample "Deforestation and Marginal Cost"

World has been at the alarming condition of land deforestation. Deforestation is done either by clearing the entire land or degrading it. Main reasons cited for the purpose are cultivation, agriculture, collection of fuel wood, logging, mining, industrial development, large dams and tourism etc. All businesses conducting these activities provide reasons that apparently justify and for the short run only. For instance, commercial companies conduct logging for their need of timber and defend themselves with responses that logging is conducted with selective process and the entire forest is not cleaned up which ensure that forest re-grows. However, here the marginal cost incurred is much higher than marginal revenue. Firms include only the cost of logs used. And it does not account for cost of all trees cut down and rejected for not meet specification. The other cost that is involved and not accounted for includes:
Cost of regeneration of the specific part which then takes hundreds of years,
Cost of damages to soil component of the area due to method of taking heavy machinery to the forest land,
Cost of damages due to careless means of taking desired log off the forest causing further damage to other standing trees,
and road developed by this off-loading of logs are then made permanent road-ways by farmers of near-by areas etc. leaves land no more feasible for forest re-growth.
Firms who undertakes this activity does not consider these damages as their cost. Their profitability is based on marginal revenue from doing business with the products of these logs such as furniture incremental to the cost of used logs only.
Similarly, other activities such as cleaning land for agriculture practices bring benefit of agriculturist for certain period of time. Such land initially provides best quality agricultural output; quality decreases overtime and after certain period land remains no more productive. This left out land also does not remains feasible for forest growth and that part of earth turns barren. It takes years for land to get feasible again for agricultural process or forestation. Hence, the actual marginal cost of deforestation; the land occupied by each tree is much higher than agricultural output produced.
Deforestation by mining companies has also been destructive for rain forest. Mining companies turn the land upward down for exploration , Though they account for replanting cost as well but the fact remains that regeneration is the natural process that takes years and no marginal revenue can takes the firm into profit zone after accounting all these actual cost. Hence, the marginal revenue of every unit produced in each of mentioned activities is much lower than the actual marginal cost incurred by these activities. Accounting for all these marginal costs which is much higher than capital intensive cost component of exploration would leave firms with no economic justification of profit. Read More
Cite this document
  • APA
  • MLA
(“Deforestation and Marginal Cost Case Study Example | Topics and Well Written Essays - 500 words”, n.d.)
Deforestation and Marginal Cost Case Study Example | Topics and Well Written Essays - 500 words. Retrieved from
(Deforestation and Marginal Cost Case Study Example | Topics and Well Written Essays - 500 Words)
Deforestation and Marginal Cost Case Study Example | Topics and Well Written Essays - 500 Words.
“Deforestation and Marginal Cost Case Study Example | Topics and Well Written Essays - 500 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Deforestation and Marginal Cost

Micro and Macro Economics (marginal revenue; marginal cost; elasticity) the addition to total revenue associated with a unit increase in output or sales. There is a direct relation between marginal revenue and total revenue. When marginal revenue is positive, total revenue increases and it falls when marginal revenue is negative. B. Define marginal cost and explain its relationship with total cost. “Marginal cost is the change in total cost associated with a unit change in quantity” (Siegel et al. 1998, p. 188). Marginal cost is thus the additional cost incurred by the producer in producing an additional...
18 Pages(4500 words)Essay


...?Deforestation “The average facade temperature of the globe has augmented more than degree Fahrenheit since 1900 and the speed of warming has been almost three folds the century long average since 1970” (Global warming). Eilperin (2009) mentioned that the earth’s surface temperature has been increased around 0.750 C during the last century itself and the atmospheric temperature may even go up by 6 degrees before the end of the current century (Eilperin). Global warming and climate changes are some of the worst problems facing by the human community at present. Atmospheric temperature is rising rapidly for the last few decades and as a result of that unexpected weather calamities are occurring. Many studies have proved...
9 Pages(2250 words)Research Paper


...?Running Head: deforestation Deforestation ID Amazon River Basin provides habitat to a large number of fauna and flora in South America. It also accommodates a huge human population which is increasing at an exponential rate. In addition to that, it also acts as a source of employment and income for thousands living in the region along with being the source of fresh water and other hydraulic sources for industrial units and residences present in the region. Other than being a source of drinking water and livelihood, ecological stability of Amazon River Basin acts as an incentive for various investments activities that are expected to be taken place in the area. However, excessive...
4 Pages(1000 words)Essay

Marginal Concept

... Marginal Concept Question Most of Europe’s coal mines initially closed because they were not profitable and it was cheaper to for industries to use coal imported from countries like Poland. The coal industry was nationalized and the government subsidized it since the major coal buyers such as power stations were also owned by the government (Dubinski 1). The cost of running the coal industry was too high yet its substitutes such as oil and gas were cheaper to use. Fact is the marginal cost of burning coal in efficient ways that curb pollution is higher than burning alternative fuels such as gas and oil. The only circumstances under which coal mines would reopen is if the marginal cost of producing alternative oils would rise... and the...
3 Pages(750 words)Case Study


...05 May 2006 Deforestation Recent years, deforestation becomes one of the most serious problems affected all countries. Sustainable forestry and woodland management allow the promotion of small-scale social forestry programs, where local communities are involved in the establishment of tree nurseries. Environmentalists and ecologists pay a special attention to Brazilian Amazon and deforestation which has a great impact on global ecology and air quality. Deforestation, largely for logging and wood-fuel purposes, is common in South America. The main causes of deforestation in this region are agricultural development, expansion of mining and logging (for...
4 Pages(1000 words)Essay

Opportunity cost direct and indirect cost.&marginal cost, average cost and sunk cost

...Opportunity cost, direct and indirect cost, marginal cost, average cost and sunk cost Q1. In an opportunity cost situation, indirect costs are greater than the direct costs. Two months ago, I would have earned $50 to work for five straight rush hours. The work required watching a neighbor’s store. However, I preferred watching the Justin Beeber concert. The concert cost was $20. The transportation cost to attend the popular Justin Beeber concert was $15. The concert costs are direct cost. Evidently, the $50 indirect...
2 Pages(500 words)Assignment

Marginal cost

...Marginal cost Introduction This paper seeks to explain to potential investors, the financial aspect of a business venture by use of; business forecasts methodology. When coming up with a business strategy, to present to potential investors, assumptions are listed that will be used in making financial data. The documents that I have used in this paper in to explain to potential investors about the business strategy are; cash budget, forecast income statement and a forecast balance sheet. These documents are the ones that I will use, to give a representation of how the business will run in the future, and how income will be of benefit, to the business. Assumptions used The balance sheet that I came up...
6 Pages(1500 words)Essay

Cost of capital, weighted avareage cost, cash flow, marginal cost

...Cost of capital Cost of capital The relationship between risk and return to investors determines when and where to invest. To the risk averse investors, they prefer low returns with lower risks while the risk takers would invest in high-risk securities with high returns (Chandra, 2008). In most cases, probability of getting high returns is associated with high risks. This relationship also makes the investor be aware of their risk tolerance which improves on the investment approach. The relationship further explains that the risk takers will always ignore the risk involved and concentrate on returns on the investment. Annual Discount Rate 13% Initial investment -20000 -20000 1st year...
2 Pages(500 words)Assignment

Deforestation Crisis

...Question One of the major environmental concerns in the world is tropical deforestation. Over the last decade, almost 13 million hectares of forest land has lost due to factors like over population, construction and agricultural expansion. Forests play an important role in the sustenance of life on earth; they attract rain and most importantly balance carbon dioxide in the atmosphere. Therefore, deforestation is a serious matter that has raised concerns in the entire world (Spilsbury 44). United State of America is one of the core countries characterized by high urban and industrial centers. It is also capital intensive, have high production technology patterns, high wages and low exploitation of labor....
1 Pages(250 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Case Study on topic Deforestation and Marginal Cost for FREE!

Contact Us