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On Discarding Low Quality Produce
Author(s) -
Nguyen Dung,
Vo Trang T.
Publication year - 1985
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1241083
Subject(s) - convexity , demand curve , quality (philosophy) , price elasticity of demand , culling , function (biology) , economics , econometrics , yield (engineering) , elasticity (physics) , mathematical optimization , microeconomics , mathematics , financial economics , medicine , philosophy , herd , materials science , epistemology , evolutionary biology , veterinary medicine , metallurgy , composite material , biology
This paper considers a model of optimal culling in which demand is generally nonlinear. We show that the shape of the break‐even quality price change curve depends on both the concavity‐convexity of the demand function and the price elasticity. We specify that the actual quality price change is an increasing function of the minimum quality but at a decreasing rate. Conditions ate then obtained to ensure that a minimum quality level chosen from a permissible set would yield maximum total profits for the industry.