Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

3.31 The output elasticity of demand for input x; is defined as y (w, y) = (ax(w, y)/ay) (y/x;(w, y)). (a) Show that iy

 

3.31 The output elasticity of demand for input x; is defined as y (w, y) = (ax(w, y)/ay) (y/x;(w, y)). (a) Show that iy (w, y) = (y)eiy (w, 1) when the production function is homothetic. (b) Show that y = 1, for i = 1,..., n, when the production function has constant returns to scale.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

a If the production function is homothetic it can be ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Microeconomics

Authors: Hal R. Varian

9th edition

978-0393123975, 393123979, 393123960, 978-0393919677, 393919676, 978-0393123968

More Books

Students also viewed these Economics questions

Question

Is there statistical significance? What was the effect size?

Answered: 1 week ago