**If we now return to the formulation of equation (19) which sets a price system we see that we have: **
**n equations for wholesale prices, n equations for retail prices and one condition (keeping the level of retail prices constant), we have then 2n + 1 equations; **
**n unknown wholesale prices, n unknown retail prices, n unknown turnover tax rates and three unknown parameters m, n, r. We have then 3n + 3 unknowns. **
**This means that it is possible to set all the turnover tax rates and two parameters arbitrarily; the size of the third parameter will be the result of the solution of the system of equations. ** |