The Theorical detemination of economic durable good Supply

This paper represents a theoretical model from which the supply function for a durable goods is derived. It turns out that consumer at the equilibrium condition equates its user cost with the marginal value of services received by using an additional unit of durable goods. The stock price is obtained from this condition. In addition, at the equilbrium condition for producer, the stock price is equal to the marginal production cost which results the supply function of durable goods. Since the fa ctors such as interest rates, depreciation rates, Wold of goods and the marginal value ofservecies determine the stock price, Thus they Life ime affect the supply function indirectly