TITLE:
An Empirical Multi-Output Production Decision Model for the Profit Maximizing Multiproduct Firm
AUTHORS:
Ekaterina Vorotnikova, Serhat Asci
KEYWORDS:
Multiproduct Firm, Multi-Output Production Decision, Differential Production Component
JOURNAL NAME:
Theoretical Economics Letters,
Vol.5 No.4,
August
20,
2015
ABSTRACT: Empirical estimation of
a theoretical multi-output production model that uses multiple inputs is
difficult because of the complexities of its functional form. By using proper
parameterization to linearize theoretical model’s functional form, this paper
develops an empirical estimation for multi-output production decision using
multiple inputs in the profit maximizing firm, namely, multi-output production
decision model. The model aligns with the dual approach of cost minimization
and revenue maximization for the profit maximizing multi-product firm while
keeping jointness in production structurally intact.