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Producer Behaviour Under Strict Rationing and Quai-Fixed Factors

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  • Guyomard, Herve
  • Mahe, Louis Adrien Pascal

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.

Suggested Citation

  • Guyomard, Herve & Mahe, Louis Adrien Pascal, 1993. "Producer Behaviour Under Strict Rationing and Quai-Fixed Factors," Bulletins 7489, University of Minnesota, Economic Development Center.
    • Handle: RePEc:ags:umedbu:7489
    DOI: 10.22004/ag.econ.7489
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    References listed on IDEAS

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    11. Lee, Lung-Fei & Pitt, Mark M, 1986. "Microeconometric Demand Systems with Binding Nonnegativity Constraints: The Dual Approach," Econometrica, Econometric Society, vol. 54(5), pages 1237-1242, September.
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    Cited by:

    1. Bureau, Jean-Christophe, et al, 1997. "Quota Mobility in the European Sugar Regime," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 24(1), pages 1-30.
    2. Herve Guyomard & Louis Pascal Mahe, 1994. "La nouvelle instrumentation de la politique agricole commune," Post-Print hal-01601253, HAL.
    3. Louis-Pascal Mahé & Carole Ropars, 1998. "Régulation de l'exploitation d'une ressource renouvelable : inefficacité d'un rationnement d'input et efficacité des quotas individuels transférables (QIT)," Post-Print hal-02349927, HAL.

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