Multiproduct Cost Relationships for Retail Fertilizer Plants

Jay Akridge and Thomas Hertel

American Journal of Agricultural Economics, 1986, vol. 68, issue 4, 928-938

Abstract: Retail fertilizer plants produce a number of products and services. To analyze the relationship between cost and output for these multiproduct firms, a short-run, translog cost function is estimated using pooled data. Measures of economies of scope and scale are calculated. Results indicate plants can lower average cost by increasing output and by diversifying into anhydrous ammonia. Furthermore, preliminary evidence indicates that firms in the sample are overinvested in plant and equipment.

Date: 1986
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:68:y:1986:i:4:p:928-938.

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