A method for calibrating the total annual cost function of a single firm is developed by using optimal control and assuming rational behavior of the firm. The method is applied to peat-harvesting firms in New Brunswick, but has wider applicability. Information on the exogenous variables is available without resorting to surveys of individual firms, leaving as endogenous the variables specific to a firm. The results are sufficiently promising that the approach suggested herein may serve as a useful set of parameters for individual firms in follow-up work.
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