Tajidan, Tajidan (2015) Producer Surplus as a Measure for Opportunity Cost: The Case of Corn Farming on the Hill of Mount Rinjani – Indonesia. Advances in Management & Applied Economics, 5 (3). pp. 37-42. ISSN 1792-7552
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Abstract
Opportunity Cost is a decision making tool to select a more appropriate alternative for a final decision. The usual measure for opportunity cost is farm profit or income.This paper aims at: (1) introducing producer surplus as a measure for opportunity cost; (2) utilizing producer surplus as a determinant in deciding actions that provide the best benefit for farmers. To achieve the above objectives, a research was conducted on 120 units of corn farming on the hills of Mount Rinjani, i.e. in Bebidas Village and PringgabayaUtara Village. Data were collected through face-to-face interviews guided by a structured questionnaire. The study concludes the followings: (1) Producer surplus can be applied as an alternative measure for opportunity cost; (2) If the farmers are expected to leave the corn farming, they need to gain a compensation of IDR 2 million/ha in order to maintain welfare; (3) Producer surplus can also be used as a measure for opportunity cost for any other farms.
| Item Type: | Article |
|---|---|
| Keywords (Kata Kunci): | producer surplus, opportunity cost, compensation, decision, corn farm |
| Subjects: | S Agriculture > S Agriculture (General) |
| Divisions: | Fakultas Pertanian |
| Depositing User: | Dr.Ir.MS Tajidan Tajidan |
| Date Deposited: | 28 May 2022 04:04 |
| Last Modified: | 07 Jun 2022 05:38 |
| URI: | http://eprints.unram.ac.id/id/eprint/28844 |
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