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Often, a single production process gives rise to a mass distribution of quality levels. If prices vary with quality, then input use is determined by interactions between the production-quality-input use relationship and the price-quality relationship. Using the dominance methods, the way in...
Persistent link: https://www.econbiz.de/10005433224
Industrial processing emphasizes information on and control over quality of raw materials. This letter establishes conditions under which informed control involves ensuring uniformity in inputs and increased uniformity encourages more extensive processing. The Boltzmannï¾–Shannon entropy...
Persistent link: https://www.econbiz.de/10005433232
Price-dependent loan agreements at low interest rates have sometimes been included in North American hog sector long-term marketing contracts. We show that a general form of this stipulation can be viewed as a hybrid between a forward rate agreement and a bundle of commodity spot options. In...
Persistent link: https://www.econbiz.de/10005433240
Persistent link: https://www.econbiz.de/10005433260
Previous studies disagree on the effects of insurance on fertilizer application rates. The effect of increased fertilizer on the probability of low yields primarily determines whether fertilizer and insurance are substitutes or complements. The authors estimate conditional distributions of corn...
Persistent link: https://www.econbiz.de/10005433275
Conventional classroom analysis of technology adoption in a monopoly neglects some important situations. A more comprehensive analysis provides the instructor with opportunities to present some critical economic concepts. By permitting intersecting cost functions, one can show why innovations...
Persistent link: https://www.econbiz.de/10005433381
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Persistent link: https://www.econbiz.de/10005433511
Using a reference utility entry and exit criterion, we consider an equilibrium model of production where market price is random but endogenous with respect to industry output. General conditions are identified for industry output to increase under shifts in costs and in the distribution of...
Persistent link: https://www.econbiz.de/10005433515
The impact of price-quality schedule changes on the 'optimal input choice' of producers which subscribe to a minimum quality standard is investigated using the stochastic dominance method. In addition, the effects of a transition from a fixed price schedule to a quality-dependent price schedule...
Persistent link: https://www.econbiz.de/10005433633
In this paper, the authors develop a microeconomic optimization model of grain elevator cleaning and commingling decisions when the firm is faced with different discounting schedules. Using generalizations of Jensen's inequality, it is shown that a convex (concave) discount schedule encourages...
Persistent link: https://www.econbiz.de/10005433645