Supply Analysis Model •In an

Primary agricultural markets are often characterized by oligopsony. This paper investigates the effect of an agricultural product supply shift on the equilibrium prices and quantities of farm products purchased by food processors. and on profits of food processors. The principal comparative static result indicates that, under oligopsony, qualitative implications of a disturbance in the supply of raw input differ from that under perfect competition and monopsony. Effects of other disturbances are identical in sign to the perfectly competitive case, although magnitudes may differ. Implications for supply estimation and agricultural policy analysis are briefly discussed. Key words: conjectural variation, oligopsony, supply shifts. Agricultural supply analysis is generally con-ducted using models that postulate a perfectly competitive market structure. Thus, increases in agricultural product supply are assumed to yield price decreases, ceteris paribus. This proposi-tion has served as the basis of the literature o