NEGATIVE MILK SUPPLY RESPONSE UNDER CONSTRAINED PROFIT MAXIMIZING BEHAVIOR

Loren W. Tauer and Harry Kaiser

Northeastern Journal of Agricultural and Resource Economics, 1988, vol. 17, issue 2, 7

Abstract: A conceptual model is formulated that shows that a downward sloping supply function may exist for a profit maximizing firm facing a cash-flow constraint. The necessary requirement is that at least one factor must be a non-cash input. The model is tested using analysis of variance on two groups of producers from farm record data, one group facing a binding budget constraint the other group not. The results indicate that farms facing a cash flow constraint increase output more than farms not restricted by a cash flow constraint in response to a price decrease.

Keywords: Livestock; Production/Industries (search for similar items in EconPapers)
Date: 1988
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:nejare:28844

DOI: 10.22004/ag.econ.28844

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