Page 15 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.70, # 1, 2013, pp. 4-22

for corn could be determined by setting MFC equal to MVP I. The optimal levels of

irrigation application could be calculated under different prices of corn (P corn) and

natural gas (P NG) (Equation 11).

MVP I= (-0.574*I+15.809)*P corn (10)

. 1 08 * P  . 5 66  15 . 809 * P
I = NG corn (11)
 . 0 574 * P corn

By solving Equation 11 with applying assumed price range of corn price and

natural gas, the optimum level of irrigation application could be determined which

is shown in Table 5.

The variable cost regarding irrigation application for corn is obtained by

multiplying the optimum levels of irrigation application with per unit irrigation

variable cost. The levels of corn profit at each optimum level of irrigation

application under the same ranges of natural gas and corn price are shown in table 6.

Yield-PPET model

The yield-PPET response function for corn is developed by inserting the

coefficients generated in the corresponding model, shown in Equation 12.

2
Y corn= 3.475*PPET -0.014*PPET (12)

In order to reflect the PPET-TW relation, a linear regression model is used to

predict PPET as a function of TW which is shown in Equation 13.

14