Producers' Adjustment Trajectories Resulting in Equilibrium in the Economy with Linear Consumption Sets
We consider the Debreu private ownership economy in which all consumption plans belong to a proper linear subspace of the commodity-price space Rl. This geometric property of consumption sets means that there is a dependency between quantities of some commodities in all consumption plans. Competitive mechanism makes producers adjust their plans of action to the same dependency. It results in the mild evolution of the production sector to offer production plans which are also contained in the given subspace of Rl. Modified production system and the initial consumption system can form an economy in equilibrium. The aim of this paper is to model gentle changes of producers' activity that give equilibrium in the Debreu economy with consumption system reduced to a proper subspace of Rl without considering additional costs. (original abstract)
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