Рг =
Y.
βw*
(16)
Relative prices must then be:
(17)
Free entry drives profit to zero, and the optimal output level is the same for each firm in any
region:
*
x*
α (σ -1)
β
(18)
the associated equilibrium labour input is also constant and given by:
l* = α + βxi = α + α (σ -1) = ασ
(19)
Full employment of the labour force allow us to determine the number of manufacturing
varieties in equilibrium13:
ni = Li
i у*
li
Li
ασ
(20)
13 Since each variety is produced in one location by a single firm, ni represents both the number of varieties and
the number of firms in region i.
17
More intriguing information
1. The name is absent2. The name is absent
3. The name is absent
4. The name is absent
5. Evidence-Based Professional Development of Science Teachers in Two Countries
6. Neighborhood Effects, Public Housing and Unemployment in France
7. A Regional Core, Adjacent, Periphery Model for National Economic Geography Analysis
8. Performance - Complexity Comparison of Receivers for a LTE MIMO–OFDM System
9. Achieving the MDGs – A Note
10. The name is absent