Pj
mi =----j-----M
(3)
j σ
^ V 1-σ 1σ-1
Σ P
L i J
Equation (3) is the compensated demand function for the jth variety.
The minimum cost of attaining a fixed amount of M, can be expressed by using equation (3)
and summing over all the varieties as:
1
(4)
where the second part of the expression on the right-hand side can be easily interpreted as the
manufactured goods price index:
P = ∑ p^σ
1
1-σ
(5)
P measures the minimum cost of purchasing a unit of the composite index M, and can be
thought of as an expenditure function.
Demand for each variety j can be written as:
mj
Pj
P
-σ
(6)
11
More intriguing information
1. The name is absent2. For Whom is MAI? A theoretical Perspective on Multilateral Agreements on Investments
3. The name is absent
4. Special and Differential Treatment in the WTO Agricultural Negotiations
5. Ex post analysis of the regional impacts of major infrastructure: the Channel Tunnel 10 years on.
6. Voting by Committees under Constraints
7. The name is absent
8. Effects of a Sport Education Intervention on Students’ Motivational Responses in Physical Education
9. Partner Selection Criteria in Strategic Alliances When to Ally with Weak Partners
10. Conditions for learning: partnerships for engaging secondary pupils with contemporary art.