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By Della Dora J.

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Consequently, a measure of demand which reflects the services available from the input is given by dividing the money values of the input—equal to quantity times money price—by the constant quality price index. } The basic hypothesis of the regression approach to the measurement of a constant quality price index for an input is that price variation between brands of the input t This section is for more advanced students and may be omitted without disturbing continuity. It is based on A. J. Rayner, op.

Alternatively, with a new input the appraisal involves weighing up the advantages of the new input against the costs involved in changing the techniques of production. Thirdly, even when a producer has reached a decision it is often operationally impossible to adopt it instantaneously. Finally, the adoption of an innovation may include a trial stage so that the innovation is only gradually introduced into production. Therefore, the change in aggregate demand to changing relative prices is likely to be spread over several production periods, where it involves the adoption of innovations.

We can call this price the expected price. It is likely that farmers form expectations on the basis of their experience of past prices. f The simplest hypothesis that relates expected price to past prices is the one which assumes farmers formulate their expectations on the price experience of the most recent production period only. This hypothesis states that expected or anticipated product price for this production period (Ppt) is equal to the price received in the last period ( P P ( 1) . This particular model of the formation of expectations would t Empirical evidence supporting this hypothesis is presented by W.

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Approximation de fonctions complexe au sens Hermite-Pade et Hardy by Della Dora J.


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