Suppose initially that the optimal O 1 ¼0, in which case the
fiscal balance given by (4.3) reduces to the Henry George condi-
tion. Is there such a solution? Note that n 2=A is solved directly
from (4.5). Then, plugging this into (4.2) we find a k to satisfy
(4.2). Given this k, we find n from (4.1) and R 1 from (4.3). Using
the variables found so far in (4.7) we get n 2 and then n from (4.6).
But this n, and the k we found previously need not satisfy (4.1).
Hence, a solution cannot be guaranteed to occur when O 1 ¼0. But
allowing O 1 40 an additional degree of freedom is gained and it
may be possible that all seven equations can be solved.