The lens condition with two factors

Abstract

The authors give a simple, constructive proof that the lens condition implies the factor price equalization condition when there are only two factors. Taking stock of the conditions under which the lens condition is equivalent to the factor price equalization condition, there are the conditions of two factors or two goods or two countries, or the condition that the rank of the factor-use matrix is equal to the number of goods. It is shown that, in an essential sense, there are no other such conditions.