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Abstract
This paper presents a model of a cooperative that pays patronage refunds. The analysis is short-run in nature. Each patron, and the cooperative, has some fixed assets. Decisions on capital structure are assumed to have been made prior to this short-run analysis, and some of these decisions place constraints or impose parameters on the short-run analysis. It is assumed that the objective of the cooperative is to maximize total profits of all member patrons. The purpose of this paper is normative: to present an explanation of how a cooperative should operate if its objective is the one assumed here. The paper presents aTositive analysis of any cooperative that has as its objective the one assumed.