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

Short-run and long run profits questions, Suppose you own a home remodeling...

Suppose you own a home remodeling company. You are currently earning short-run profits. The home remodeling industry is an increasing-cost industry. In the long run, what do you ex

What is a statutory demand, The word length should be between 1200 to 1600 ...

The word length should be between 1200 to 1600 words. Please submit a hard copy with a coversheet to the lecturer at the commencement of class in Week 8. Find and read the Judgm

Curves, how to map the curves

how to map the curves

Market structers, what are the majotr sources of monopoly

what are the majotr sources of monopoly

What kinds of sustainability questions do raise, What two developments are ...

What two developments are demanding new ways of looking at the economic world in the 21st century?  What kinds of sustainability questions do they raise? Two developments that

Determine amplitude of the different diffracted plane wave, Consider a thin...

Consider a thin transparent plate whose thickness d(x,y) is a square (instead of a sinusoidal) periodic function of x of period Δ=λ. Show that the angle θ between the diffracted wa

Please write an essay (2-2.5 pages) , Please write an essay (2-2.5 pages) b...

Please write an essay (2-2.5 pages) based on this paper You">http://www.nobelprize.org/nobel_prizes/economics/laureates/2001/akerlof-lecture.pdf You pick one over 6 macroeconomic

Preference to non-debt creating capital flows, Preference to Non-debt Creat...

Preference to Non-debt Creating Capital Flows: The most important element of strategy has been the paradigm shift in the attitude towards inflow of capital from abroad. Capit

Three factors by america palce at world economy leading edge, 3 factors by ...

3 factors by america palce at world economy leading edge 3 factors have taken pride of place in explanations of America's place at the world economy's leading edge in its level

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