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The book provides a clear understanding of the subject of Factor demand and output supply by formulating Cobb-Douglas profit function. Output supply and input demand are closely interlinked to each other, therefore, any change in input and output prices affect the input demand and output supply simultaneously.The Agricultural Prices and Cost (APC) scheme under the guidance of government of Maharashtra provides valuable data about agriculture in Maharashtra.This study used cross sectional cum time series data of Vidarbha region for the selected four principle crops. These four crops occupied about 70 per cent area of the gross cropped area.The theory of profit function, developed to helps in overcoming the problem of simultaneous equation bias, if present. Another distinct advantage of this approach over production function is that with the help of duality theorem (Shephard, 1953), the variable factor demand function and supply function of products can be derived directly from the estimated profit function.This study will provide useful information which can be used to project the direction and extent of the response of farmers to changes in input and output prices.
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