Abstract: If a probability is interpreted by Ramsey’s degree of belief,commodity utility endowed with the properties of von Neumann-Morgenstern’s utility can be measured.On the ground that a consumer’s preference for alternative commodities is the dual system of separable value,this paper constructures the new model of demand,and derives the nonlinear demand function used in strictly analysis of a model industry,which afford scientific basis for observing and studying activities of modern industrial organization and competition behavior.

Key words: effective demand, exponential utility function, nonlinear demand function