Economist: Tropicorp, which constantly seeks profitable investment opportunities, has been buying and clearing sections of tropical forest for cattle ranching, although pastures newly created there become useless for grazing after just a few years. The company has not gone into rubber tapping, even though greater profits can be made from rubber tapping, which leaves the forest intact. Thus, some environmentalists argue that Tropicorp’s actions do not serve even its own economic interest. However, the initial investment required for a successful rubber-tapping operation is larger than that needed for a cattle ranch; there is a shortage of workers employable in rubber-tapping operations;and taxes are higher on profits from rubber tapping than on profits from cattle ranching.
Consequently, the environmentalists’ conclusion is probably wrong.
In the economist’s argument, the two boldface portions play which of the following roles?