Marketing of butter in the EC: Demand functions and policy alternatives, with a restriction to four member countries

Abstract

In this article optimum instrument values for two different objectives of an EC marketing policy for butter are considered. In the first part of the study the demand equations of four EC countries, le., West Germany, the United Kingdom, the Netherlands and Denmark, are estimated and discussed. These countries cover about 58 percent of the total butter consumption of the EC. The second part contains the formulation of a maximum revenue policy and a budget minimizing policy. With each of these two different aims, the optimum price of butter is first determined. Then the optimum price of butter is considered simultaneously with optimum values of other policy instruments.