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

The demand for big mac, illustration for demand of big macs using indiffere...

illustration for demand of big macs using indifference curve and budget line

Monopoly market, 9. The average supernormal profit for the firm is

9. The average supernormal profit for the firm is

Outline the main components of trade liberalization, Problem: "Mauritiu...

Problem: "Mauritius offers an interesting case study of successful trade liberalization and export-led development in Sub-Saharan Africa. This is a notable achievement given t

Income, trend and structure of national income in nigeria

trend and structure of national income in nigeria

Please Help, 7.Consider the following production possibilities table: Op...

7.Consider the following production possibilities table: Option Y X A 0 100 B 80 80 C 120 50 D 140 10 a)Provide a measure of the approximate marginal opportunity cost of

Unemployment, Unemployment: Individuals who want to be employed, and are ac...

Unemployment: Individuals who want to be employed, and are actively seeking work, but can't find a job, are considered ‘officially' unemployed. Individuals who aren't working, but

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