(the production function), it follows that dk=pdK, and dK dK dt (2) In domar's model, equilibrium is defined to be a situation in which productive capacity is fully utilized. To have equilibrium is, therefore, to require the aggregate demand to be exactly equal to the potential output producible in a year that is,Y=k. If we start initially from an equilibrium situation, however, the requirement will reduce to the balancing of the respective changes in capacity and in aggregate demand; that is dy dK t What kind of time path of investment I(t) can satisfy this equilibrium condition at all times(the production function), it follows that , and d = dK I dt dK dt d    = = ( 2 ) In Domar's model, equilibrium is defined to be a situation in which productive capacity is fully utilized. To have equilibrium is, therefore, to require the aggregate demand to be exactly equal to the potential output producible in a year; that is, . If we start initially from an equilibrium situation, however, the requirement will reduce to the balancing of the respective changes in capacity and in aggregate demand; that is Y =  dt d dt dY  = ( 3 ) What kind of time path of investment I(t) can satisfy this equilibrium condition at all times?