Changes in Purchase Prices and Efficiency vs. Production Profitability in Agriculture: Analytical and Empirical Approach

Abstract

Abstract The article discusses the issue of the impact of changes in purchase prices of an agricultural product on production profitability in agriculture, and more precisely with respect to agricultural producers on a given agricultural product market (in a given sector) in an analytical and model approach. The logic of formal deductive reasoning is then illustrated and verified empirically. The authors’ own analytical description of the relationship determining changes in the level of production profitability for agricultural producers, with a particular emphasis on the change in the purchase price, is in fact the goal and added value of the article. It enables the identification of dependencies resulting from market laws that affect changes in production profitability. In particular, the authors present the influence of mutual relationships between changes in the purchase price level and the purchase volume on revenue, and thus production profitability. The article has a theoretical and cognitive and, to some extent, methodological message. The reasoning in the article is carried out in terms and at the level of generality appropriate for microeconomics and the theory of agricultural economics as well as a given product market for agricultural producers.