Two major implications are observable from this analysis. (1) 

 Changes in resource bases and shifts in technology, commonly called 

 "short-run supply shifters," are more important in determining quan- 

 tities supplied in the Northeast than is the elasticity of the supply 

 functions as determined by this study. This is true even in the inter- 

 mediate time period. The importance of a supply shifter is clearly seen 

 in Figure 7 when the supply functions for the 1960 resource base are 

 compared with the supply functions for the 1965 resource base. (2) The 

 total supply potential for milk in the Northeast declined considerably 

 between 1960 and 1965 due to the decline in the resource base. It is 

 doubtful that new technology has been developed to offset this decline 

 in potential due to loss in resource base. In spite of this, there exists a 

 substantial potential for expansion in milk supply if all dairymen 

 adopted the top 25 percent technology available to them in 1960. 



o 



Blend price-quantity curve 



Manufacturing demand 



Fluid demand 



Quantity of Milk 



Figure 6. Theoretical Fluid Demand, Manufacturing Demand, 

 and Blend Price-Quantity Curve 



38 



