Input demand and output supply on Irish farms— A micro-economic approach

Abstract

In this paper a profit function approach is used to derive a set of input demand and output supply equations, the parameters of which are used to estimate a set of own and cross price elasticities of demand and supply. Both compensated and uncompensated elasticity estimates are presented. The methodology used permitted the testing of some of the assumptions of the neo-classical theory of the firm. The data used are from a cross-section of farms. While the empirical results did not meet some of the requirements of profit maximisation the methodology proved useful in describing the inter-relationships between outputs and inputs.