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Abstract

This article provides an introduction to the neoclassical theory of cooperatives, which has been useful for generating insights into the behavior of cooperatives in various market structures, helping cooperatives develop business strategies consistent with their objectives, and informing public policy decisions concerning cooperatives. Part I of the article presented the basic elements of the neoclassical theory as it pertains to farm supply cooperatives. Part II focuses on the neoclassical theory as it applies to marketing cooperatives. Topics covered include strategies for raising member raw product prices, open- and restricted-membership policies, and the effects of cooperatives on economic welfare.

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