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

Average cost curve, Why short run average cost curve is ‘U’ shaped

Why short run average cost curve is ‘U’ shaped

Profits, explain normal profits

explain normal profits

Markets, under which market structure does the banking sector fall?

under which market structure does the banking sector fall?

Monopolistic competition and oligopoly, Monopolistic Competition and Oligop...

Monopolistic Competition and Oligopoly: It was recognized that most industries exhibit the features of monopolistic competition in real-life. However, it must be pointed out t

Performance of public sector enterprises, Performance of Public Sector Ente...

Performance of Public Sector Enterprises: Data reveal that the performance of the much-maligned public enterprises has shown a distinct improvement during the last 9 years. Gr

Equilibrium firms, how to find total revenue total cost approch in equilibr...

how to find total revenue total cost approch in equilibrium firms

Explain what economies of scale are, Explain what economies of scale are an...

Explain what economies of scale are and why they have become increasingly common in later years. Economies of scale - Enhance in fixed factors, but output enhances at a propo

Limitations of the services sector, Limitations of the Services Sector: ...

Limitations of the Services Sector: The services sector in India, as at present, suffers from low productivity and low quality in spite of fairly large investment in technolog

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