The Effects of Supply Shifts on Producers' Surplus: the Case of Inelastic Linear Supply Curves
This paper derives sufficient conditions (in terms of supply and demand elasticities) for producers to gain under different supply shifts when supply and demand are specified to be linear functions and supply is inelastic. It is shown that regardless of the type of supply shift, producers lose whenever the sum of absolute values of supply and demand elasticities is less than one, while they gain when production takes place in the elastic portion of the demand. In all other cases arising from alternative elasticity configurations simple formulas developed in this paper may be used to determine the direction of change in producers surplus.
References listed on IDEAS
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.:
- Elamin H. Elbasha, 1997. "The Calculation of Research Benefits with Linear and Nonlinear Specifications of Demand and Supply: Comment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1363-1367.
- Martin, Will & Alston, Julian M, 1997. "Producer Surplus without Apology? Evaluating Investments in R&D," The Economic Record, The Economic Society of Australia, vol. 73(221), pages 146-58, June.
- Geoff W. Edwards & Jan P. Voon, 1997. "The Calculation of Research Benefits with Linear and Nonlinear Specifications of Demand and Supply: Reply," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1368-1371.
When requesting a correction, please mention this item's handle: RePEc:ags:aergaa:26430. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.