  The problem of arriving at a principled method of pricing goods and services
was very satisfactorily solved for conventional goods; however, this solution
is not applicable to digital goods. This paper studies pricing of a special
class of digital goods, which we call {\em semantically substitutable digital
goods}. After taking into consideration idiosyncrasies of goods in this class,
we define a market model for it, together with a notion of equilibrium. We
prove existence of equilibrium prices for our market model using Kakutani's
fixed point theorem.
  The far reaching significance of a competitive equilibrium is made explicit
in the Fundamental Theorems of Welfare Economics. There are basic reasons due
to which these theorems are not applicable to digital goods. This naturally
leads to the question of whether the allocations of conventional goods are
rendered inefficient or "socially unfair" in the mixed economy we have
proposed. We prove that that is not the case and that in this sense, the
intended goal of Welfare Economics is still achieved in the mixed economy.
