Year: 1988
Type: article
Abstract: A conceptual model is formulated that shows that a downward sloping supply function may exist for a profit maximizing firm facing a cash-flow constraint. The necessary requirement is that at least one factor must be a non-cash input. The model is tested using analysis of variance on two groups of producers from farm record data, one group facing a binding budget constraint the other group not. The results indicate that farms facing a cash flow constraint increase output more than farms not restricted by a cash flow constraint in response to a price decrease.
Authors: Loren W. Tauer, Harry M. Kaiser
Institution: Cornell University
Language: English
Subfield: Safety Research
Field: Social Sciences
Domain: Social Sciences
SDG: Zero hunger
Open Access status: green
OpenAlex ID: W1480180104