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Economies of size in wineries and impacts of pricing and product mix decisions
Author(s) -
Folwell Raymond J.,
Castaldi Mark A.
Publication year - 1987
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/1520-6297(198723)3:3<281::aid-agr2720030304>3.0.co;2-r
Subject(s) - attractiveness , product (mathematics) , economics , winery , business , investment (military) , unit (ring theory) , agricultural economics , wine , monetary economics , mathematics , psychology , physics , geometry , mathematics education , politics , political science , law , psychoanalysis , optics
Five wineries ranging in size from 10,000 to 900,000 gallons were analyzed as to investment and operating costs and the impacts of changing product and input prices on their relative financial attractiveness. The larger wineries, while being more costly to establish, offer lower per unit operating costs and greater financial returns. The returns to smaller wineries tend to be more sensitive to wine or product prices than grape and input prices.