Abstract
Derived demand for roundwood created by the three major forest-products industries in Ontario from 1952 to 1980 was estimated from the production functions of the industries. The Cobb–Douglas function represents the lumber and the veneer and plywood industries, and the constant elasticity of substitution (CES) function represents the pulp and paper industry. In all three industries, the derived demand for roundwood is price inelastic. A theorem that the sum of partial price elasticities of derived demand when output of the final product is held constant is equal to zero has been proved. Demand by the lumber industry showed regular fluctuations throughout the 29-year period of study, while that by the other two industries rose steadily except for a few slumps.
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