Microeconomics of Agricultural Producers' Income

Authors discuss demand- and regulation-related determinants of incomes of agricultural producers. The book presents theoretical constructs in the form of analytical formulas which explain in general and abstract terms the mechanism of income shaping and changing. These issues are important from the political perspective since they have the potential of influencing the incomes. The book ran reasoning based on the structures of thought typical of microeconomics, by which we explain the basic formulas and relationship that define the mechanism of determining incomes of agricultural producers. Agricultural producers maximize profit as their objective functions with a view to balancing the productivity of the factors involved with their remuneration. In view of the constraints on the demand side, the producers cannot count on an increase in revenue due to the increase in product prices. In the competitive market conditions, they must therefore adjust costs to the prices, not counting on the opposite. The effects of agricultural policy are of some importance here. This forces some change in the relationship of factors on a scale of a single farm, and on a scale of agriculture.