Partial input elasticity of output, Microeconomics

Assignment Help:

Partial Input Elasticity of Output: 

This is a short-run concept which deals with the variability of only one factor keeping the others constant. There are three kinds of returns: 

i) Increasing returns: when the AP of a factor rises and MP > AP 

ii) Constant returns: when AP is constant and MP = AP 

iii) Diminishing returns: when AP is falling MP < AP 

The concept of returns to a factor can also be expressed in terms of the "partial input elasticity of output".   

Partial input elasticity of output is also called elasticity of output with respect to a factor. It is the percentage change in output quantity for one per cent change in the quantity of a factor when all other factors remain constant.  

Elasticity of q with respect to L is given by,  

1629_Partial Input Elasticity of Output.png

let us now related this to return to scale

771_Partial Input Elasticity of Output1.png

Besides the above mentioned three returns, there can be another type known as the 'non-proportional returns to a variable factor'. Under it, initially, there is increasing returns to a factor up to a certain level beyond which there is diminishing returns.  


Related Discussions:- Partial input elasticity of output

Surplus, Surplus The surplus is a condition under that supply for a goo...

Surplus The surplus is a condition under that supply for a good or service is in excess of the demand for that good or service. When this happens, there is commonly a reduction

Explain the demand pull inflation, Explain the Demand Pull Inflation D...

Explain the Demand Pull Inflation Demand Pull Inflation:    Occurs when aggregate demand exceeds aggregate supply. If there is an excess level of demand in the economy, this w

Explain the difference between a stock and a flow, Explain the difference b...

Explain the difference between a stock and a flow.   A stock is something whose quantity is calculated at a point in time, whereas a flow measures the quantity of something ove

Assignment, In the table below are given the output (X), T.C., and Price fo...

In the table below are given the output (X), T.C., and Price for a firm. Complete the following table, and then answer the questions at the bottom of the table.   X T.C P=A.R

Bureaucratic problems, BUREAUCRATIC PROBLEMS: Bureaucratic problems en...

BUREAUCRATIC PROBLEMS: Bureaucratic problems encountered as hurdles in the implementation of economic policies are listed below: • Low levels of efficiency, effectiveness,

Current event, Select a news article dated within the previous two months a...

Select a news article dated within the previous two months and analyze the issue using the economic concepts and theory learned in this class

Rent, what do you meant by rent?

what do you meant by rent?

Define the circular flow diagram, The circular flow diagram is used to repr...

The circular flow diagram is used to represent the interdependence that exists between sectors of the economy.  The diagram illustrates that there are various collections of same e

Describe the poverty cycle, Describe the poverty cycle and suggest how a de...

Describe the poverty cycle and suggest how a developing country can break the cycle. The poverty cycle is explained as the trap developing countries can land in; low incomes →

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd