Price Determinism in Specialized Producing Economy

Abstract

In an economy with n kinds of products, producers are specialized to produce one kind of product and exchange for the others. Exchange matrix A consists of supplies and demands. Price vector p is the solution of Ap = 0.When R(A) = n – 1, the price is determined given total money amount. When R(A) = n – m, the economy can be divided into m sub-economies with no exchange of products between any two of them. In each sub-economy the price is determined.