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Efficiency of the Multiplant, Multiproduct Firm
Author(s) -
Sil Jayashree,
Buccola Steven
Publication year - 1995
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 - 10.2307/1243823
Subject(s) - relation (database) , function (biology) , scale (ratio) , microeconomics , elasticity (physics) , economics , econometrics , industrial organization , computer science , physics , quantum mechanics , database , evolutionary biology , biology , materials science , composite material
A general framework is provided for assessing the technology, cost, and efficient scale of a multiplant, multiproduct firm. We show sufficient conditions for the existence of a plant cost function, and necessary and sufficient conditions for using plant‐level data to draw exact firm‐level cost inferences. We also distinguish between plant and input nonjointness and show the optimal relation between plant‐level and firm‐level cost elasticity in a multiproduct setting. The framework is applied to a vegetable processing cooperative, which is found to operate below its efficient scale.