Let the forest grow to its peak volume and then cut it 2. Maximize the total harvests of wood that can be achieved over time, i.e., maximize the flow of wood from the forest. This latter option is achieved by harvesting at the forest age that maximizes the average growth of the trees over time. However, this approach is inefficient because it does not consider the marginal benefits and costs of a change in the rotation length. The Optimal Rotation 1.
Private benefits consist of the revenue, less harvest costs, derived from the harvest.
This amount is called the stumpage value of the forest. Versus Marginal Costs 1. Marginal benefits consist of the increase in stumpage value that occurs if we let the forest grow for another year. Market price is assumed to remain constant over time. Marginal costs consist of the sum of the additional interest foregone on the revenues from harvest and the rent foregone on the land.