The study is conducted to assess price response of Ethiopian farm households. For this purpose, a sample ofrn217 households selected from food crop growing areas is used. The households are modeled using the nonseparablernfarm household framework for the reason that the households are assumed to face incomplete laborrnmarket. The SNQ profit function is estimated to capture the production side of the households where asrnAIDS function for consumption side. Elasticities are derived from this function and utilized in calculatingrnnon-separable household model price elaticities. In addition, to examine the implication of marketrnimperfection, the separable farm household price elasticities are calculated for comparison purpose.rnThe findings show that price response of agricultural production activities are negatively affected by the risernin price of agricultural goods under non-separable framework unlike the separable one. On the other hand,rnchange of fertilizer price in downward direction has positive impact on production and input use. So, thernrise in price of agricultural goods is not the right incentive for increasing production. Hence, a morernappropriate incentive for production would be a reduction in the price of fertilizer than a rise in price ofrnagricultural goods. The possible policy implication which could be inferred form the analysis is thatrngovernments need to have the discretion to provide support in input use, particularly fertilizer, in the formrnof subsidy so as to initiate rural households to produce more.