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

Module 5 disccussion, Ask question #Minimum 100 words accepteFill out this ...

Ask question #Minimum 100 words accepteFill out this National Council on Economic Education worksheet: Technology and Monopolies (Links to an external site.) Now, pretend that you

Baumol theory, appraise baumol`s sales revenue maximazation theory as an al...

appraise baumol`s sales revenue maximazation theory as an alternative of the firm

Allocation function, Allocation Function The shifting or reallocation ...

Allocation Function The shifting or reallocation of production property into or out of markets based on shifts in prices for the products or services produced in that market.

Economics, #question.what is meant by ppc?illustrate the central problems o...

#question.what is meant by ppc?illustrate the central problems of aneconomy with this curve.

Mrp systems - basic inputs, MRP systems - basic inputs  It has been es...

MRP systems - basic inputs  It has been estimated that in the USA where MRP was originated and developed by Oliver Wight and George Plossl (1985), virtually all Fortune 500 ma

Elasticity, Five uses of elasticity on the Public Sector and five uses of e...

Five uses of elasticity on the Public Sector and five uses of elasticity on the Private Sector.

Deductive and inductive methods, what are the merits and demerits of deduct...

what are the merits and demerits of deductive inductive methods in economic analysis?

Law of diminishing marginal utility, law of diminishing marginal utility it...

law of diminishing marginal utility its assumptions, limitation, and its practical importance

Monopoly help, Monopoly and Oligopoly help?!? 1. Your firm sells a perfume....

Monopoly and Oligopoly help?!? 1. Your firm sells a perfume. The daily demand for your perfume estimated by your economists is given by P=150-5Q Your marginal cost is constant at $

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