§3. Impatience Principle B (Three Equations)

Impatience Principle B requires that the marginal rates of time preference of the three different individuals Edition: current; Page: [291] for present over future income shall each be equal to the rate of interest, and is expressed by the following three equations:21

f1 = i
f2 = i
f3 = i

where i denotes the rate of interest. These three equations are best written as the continuous equation:

i = f1 = f2 = f3.

(These equations express the fact that at the Q's the slope of the Willingness line is the same as of the Market lines.)