ABSTRACT
At market equilibrium the price of sex as seen from the demand side has to be equal to the price of sex as seen from the supply side. The amount of sex sold has to be the same, here denoted S∗.
From equations (11) and (18) we then get:
S∗ = f (Hp(Ip),Rp,Rc) (19)
where f is a function increasing inHp, that is decreasing in Ip, increasing inRp andRc. A closed form solution for the equilibrium of sex sold is a little messy but straightforward. The equilibrium wagew∗ then follows from either equation (11) or equation (18). In Figure 3 we show the equilibrium and we note that there is a unique equilibrium. The unnumbered table below describes the impact of changes in the key parameters on the equilibrium price and quantity of paid sex.
