extra-lp - Extra LP Notes With Vegetable Farm Example Whole...

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Extra LP Notes With Vegetable Farm Example
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Whole Farm Planning Whole-farm planning is largely a matter of enterprise selection. What crops and livestock enterprises will be produced on this farm in the next year?
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Background: Enterprise Combinations Economic theory behind whole-farm planning.
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Production Possibility Curve Definition: A Production Possibility Curve (PPC) is the geometric representation of the combination of products that can be produced with a given set of inputs. It can be defined for an entire economy or for a single firm .
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Graph of PPC enterprise 1 enterprise 2
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Types of Enterprise Relationships Competitive with constant substitution Competitive with increasing substitution Supplementary Complementary
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Competitive with Constant Substitution enterprise 1 enterprise 2 These enterprises use the same inputs, in the same ratios.
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Competitive with Increasing Substitution enterprise 1 enterprise 2 The enterprises use different ratios of inputs and inputs experience diminishing marginal returns in each case.
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Supplementary enterprise 1 enterprise 2 supplementary range enterprise 1 makes use of some inputs that are not needed for enterprise 2
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Complementary enterprise 1 enterprise 2 as we produce more of enterprise 1, we can also produce more of enterprise 2
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Examples Competitive Constant Sub: Competitive Increasing Sub: Supplementary: Complementary corn and milo corn and cotton soybeans and winter stockers broilers and cattle
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Terms Physical substitution ratio: Profit Ratio Quantity of Output Lost Quantity of Output Gained Profit per unit of gained output Profit per unit of lost output
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Physical Substitution Ratio The physical substitution ratio is the slope of the Production Possibility Curve.
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extra-lp - Extra LP Notes With Vegetable Farm Example Whole...

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