Qualitative Analysis Of Production And Hedging
AbstractThe analysis is concerned with a producer who has three alternative marketing outlets for a seasonal perishable product. He can sell in a spot market when production is completed, he can contract for future delivery at a fixed price, he can plan to deliver on the spot market while holding a futures market hedge during the production period, or he can elect some combination of these outlets. Circumstances which lead to different combinations of outlets being used are indicated. A result of some generality is that if the certain forward price is high enough for this outlet to be used, then total output is the same as if this were the only alternative. The price at which this outlet is used is noted. Earlier treatments had noted the result in narrower contexts.
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Bibliographic InfoPaper provided by University of Minnesota, Department of Applied Economics in its series Staff Papers with number 13765.
Date of creation: 1983
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Staff General Research Papers
11217, Iowa State University, Department of Economics.
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