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I. Introduction 2 2. The implicit solution 3 3. Nested utility functions 4 4. The implicit solution for the nested utility function 7 5. The nested CES-type utility function 9 6. The solution for a nested MCES-utility function 12 Appenuix 22 References 25 SUMMARY The Nested Modified CES-type (NEMCES) utility function is introduced here; it consists of an N-level utility tree of CES-type functions. Modifications to the CES-type utility function are made to enable more realistic descriptions in the limiting case where substitution is no longer possible. Attractive priceand quantity-indices are developed and an elegant system of demand functions, specified in terms of price-indices, results. Additionally, some suggestions for solving estimation problems in case of NETTES and CES-type functions are made.

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