Let us assume an economy where n commodities are produced and used as means of production.

Commodities 1,., n-1 are produced by single-product processes (industries 1,.., n-1) that use labor and the n commodities as circulating capital. Commodity n is produced by two processes, J = 1,2, which use not only such inputs but also a nonpro­duced commodity. The n +1 processes are described by the following notations:

Distributive variables and prices of commodities:

w is the wage rate r is the rate of profit p = p₁,...,p_n) column-vector of prices

The choice of the units of measure for quantities is such that the given absolute output of each commodity is equal to one, and the inputs coefficients denote corresponding absolute quantities.

4.1