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Handling Durable And Nondurable Farm Input Decisions Using A Single Theoretical Framework

Author

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  • Bradford, Garnett L.
  • Miller, Stephen E.

Abstract

Students in economics are taught that the optimal usage of a nundurable input occurs when the value of its marginal product (VMP) equals its marginal cost (MC). However, this fundamental condition has rarely been extended to durable inputs. Even advanced textbooks have done little to compare and contrast the optimality conditions for durables versus nondurables. This paper outlines and compares a common VMP-MC decision for (1) nondurables in a single-period time horizon, (2) durables in a finite planning horizon, and (3) durables in an infinite planning horizon.

Suggested Citation

  • Bradford, Garnett L. & Miller, Stephen E., 1999. "Handling Durable And Nondurable Farm Input Decisions Using A Single Theoretical Framework," Working Papers 18802, Clemson University, Department of Agricultural and Applied Economics.
    • Handle: RePEc:ags:cuaewp:18802
    DOI: 10.22004/ag.econ.18802
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    Keywords

    Agricultural Finance;

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