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THE FUNDAMENTAL EQUATIONS

137

selling price) and tlie volume of saving, tlie price-levelof consumption-goods is unequivocally determined,quite irrespective of tlie price-level of investment-goods.

This latter price-level depends, as we have statedabove, on a different set of considerations, which wewill examine in Section (iii.) of this Chapter. Mean-while, if we may be allowed to assume the price-levelof new investment-goods as given, we can obtain aformula as follows for the price-level of output as awhole.

Let P' be the price-level of new investment-goods,n the price-level of output as a whole,and I ( = P' . C) the value (as distinguished from I',the cost of production) of the increment ofnew investment goods.

P.R + P' .C

Then

n

0

_ (E - S) +1

E

+ :

O' o-. <iv ->

which is the second of our Fundamental Equations.As before, we can re-write Equation (iv.):

n_w 1+ i^§ . . . (v.)

w + -

(vi.)

(ii.) The Characteristics op Profit

Next, let Qj be the amount of the profit (definedas above) on the production and sale of consumption-goods, and Q 2 the corresponding profit on investment-goods, and Q the total profit.