In the GTAP model there are two types of produced commodities, goods produced for domestic markets and goods produced for export. In the base GTAPinGAMS model these goods are assumed to be imperfect substitutes produced as joint products with a constant elasticity of transformation. Specifically, if D ir is domestic output and X ir is exports, then where Y ir is the activity level for good i in region r . A Cobb-Douglas production function relates activity level and factor inputs.
Producers minimize unit cost given factor prices and applicable taxes.