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

Trend and structure of income, TREND AND STRUCTURE OF INCOME: Each sec...

TREND AND STRUCTURE OF INCOME: Each sector of the economy employs natural, human and material resources and contributes to the aggregate flow of goods and services during a gi

Profits, explain normal profits

explain normal profits

Supply and demand shifter, What happens to the market for cchicken wings if...

What happens to the market for cchicken wings if the price of beer increases?

Floating exchange rates, Floating exchange rates There are two basic s...

Floating exchange rates There are two basic systems that can be used to determine the exchange rate between one country's currency and another's: a floating exchange rates (al

Interest rate dertemination, to what extent are interest rates determined b...

to what extent are interest rates determined by the economic theory

How end of the productivity slowdown - us economy, The End of the Productiv...

The End of the Productivity Slowdown As computers improved and spread throughout the U.S. economy in 1970's and 1980's economists kept waiting to see the wonders of computing

Aspects of basic analytical frameworks in modern economics, What are the ba...

What are the basic analytical frameworks of modern economics? The fundamental analytical framework of modern economics: The fundamental analytical framework for an econom

ECO 204 Final Paper, Review the following information pertaining to the pot...

Review the following information pertaining to the potato chip industry and answer the questions below in a five to six double spaced page paper (not including title and reference

What is Economic Entity Assumption , The accountants keep all the business ...

The accountants keep all the business transactions and records of a sole proprietorship separate from the business owner''s personal transactions and For legal purposes a sole prop

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