The Effect of Price on Meta Profit Function Model: A Case of Western Indonesia Soybean
Keywords:
Effect price, soybean response, meta function and profit maximizationAbstract
Soybean farming became a strategic commodity in recent year since its role in solving food problem and government effort to improve the level of farmers income. Study used model of meta profit function in order to estimate soybean’s supply response and input demand in Western Indonesia. The aim of research was to learn deeply on supply response of farmers’ soybean. Study was done in Western Indonesia in 2019. Qualitative and quantitative approach used to analyse soybean farming problems. Results of study expressed that profit maximization and response to change in price was found. Variable prices changing was estimated to have very much effect to meta profit function model compare to input prices or other input prices. The elasticity of soybean response based on changing in price was 0.898.
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