ABSTRACT
This chapter constructs a more limited model, but one which is designed to bring out some particular features of the real world which have been somewhat obscured in the more general model. It discusses a highly simplified model, but one which does isolate and bring out some of the implications of this particular phenomenon. The chapter explores the rigidity problems which arise from the life period of instruments of production and ignores the similar problems that arise in the construction of instruments of production by assuming that the gestation period is extremely short. It assumes that labour cost per unit of output is always lower on new machinery than on any existing old machinery. The chapter considers how this four-product model would operate. It outlines the determination of the market prices for bricks and steel involves all the problems of investment decisions.
