Producer Behaviour Under Strict Rationing and Quai-Fixed Factors

Herve Guyomard and Louis Adrien Pascal Mahe

No 7489, Bulletins from University of Minnesota, Economic Development Center

Abstract: The paper examines the effect of rationing outputs and inputs on producer behaviour. Full representation of the modified supply-demand system after rationing, including shadow prices for the constrained netputs, is derived from the unrestricted profit function before rationing, and vice-versa. Attention is focused on cross-price effects which have been less explored than own-price effects which obey to the Le Chatelier principle. The theoretical framework is applied to the EC agricultural sector in order to analyse the effects of output and input rationing on the production structure of the EC agricultural sector, with emphasis on the impact of the milk quota constraint on unrestricted output supplies and input demands.

Keywords: Production; Economics (search for similar items in EconPapers)
Pages: 24
Date: 1993
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:umedbu:7489

DOI: 10.22004/ag.econ.7489

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