A Simple Model of Dairy Product Supply
AbstractDairy products are characterized by two properties, namely, perishability and short-periodic production. These properties are so unique that conventional studies in agricultural economics or in industrial organization might not explain the dairy product supply well. Hence, to understand this dairy product supply, we model it based on these two properties. We find that these properties invite middlemen who can efficiently deliver the products, and give rise to economies of scale in transportation and accessibility advantage in the dairy product supply. The economies of scale in transportation arise because greater production reduces average delivery costs per unit. The accessibility advantage occurs because lowering delivery costs significantly reduces total transportation costs in the long term.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 29653.
Date of creation: Feb 2011
Date of revision:
Accessibility Advantage; Dairy Products; Dairy Product Supply; Economies of Scale; Perishability; Short-periodic Production.;
Find related papers by JEL classification:
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John Haldi & David Whitcomb, 1967. "Economies of Scale in Industrial Plants," Journal of Political Economy, University of Chicago Press, vol. 75, pages 373.
- Jacek Cukrowski & Manfred M. Fischer, 2000. "Theory of Comparative Advantage: Do Transportation Costs Matter?," Journal of Regional Science, Wiley Blackwell, vol. 40(2), pages 311-322.
- Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
- T.J. Mules, 1972. "A Supply Function For Dairy Products," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 16(3), pages 195-203, December.
- Paul Krugman, 1990.
"Increasing Returns and Economic Geography,"
NBER Working Papers
3275, National Bureau of Economic Research, Inc.
- Philip McCann, 2005. "Transport costs and new economic geography," Journal of Economic Geography, Oxford University Press, vol. 5(3), pages 305-318, June.
- Mules, T.J., 1972. "A Supply Function For Dairy Products," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 16(03), December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.