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Input Decisions and Price-Quality Schedules

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  • Hennessy, David A.

Abstract

Often, a single production process gives rise to a mass distribution of quality levels. If prices vary with quality, then input use is determined by interactions between the production-quality-input use relationship and the price-quality relationship. Using the dominance methods, the way in which price-quality schedules affect optimal input choices is investigated. Integral and differential conditions on changes in schedules are found that, together with conditions on the quality-conditioned technology, are sufficient to determine changes in the intensity of input use.

Suggested Citation

  • Hennessy, David A., 1999. "Input Decisions and Price-Quality Schedules," Staff General Research Papers Archive 1705, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:1705
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