Document Type

Article

Publication Version

Published Version

Publication Date

7-1994

Journal or Book Title

Journal of Agricultural and Resource Economics

Volume

19

Issue

1

First Page or Article ID Number

161

Last Page

172

Abstract

Economic theorists for years have considered the possibility that the direction of technical change is altered by changes in relative prices. Prices have also been identified as one of the determinants of technical change through innovation. This paper extends the theory of the firm to cover situations in which the firm's technology set is conditional on expected prices. The basic idea is to distinguish between "market prices," or the prices that guide the firm's choices subject to the technology that is in place, and "normal prices," the prices conditioning the choice of technology. A "generalized" price effect is obtained that includes the traditional price effect as well as the technical change effect of price changes and an example is presented.

Comments

This article was published in Journal of Agricultural and Resource Economics 19 (1994): 161–172. Posted with permission.

Copyright Owner

Western Agricultural Economics Association

Language

en

File Format

application/pdf