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Output elasticity (w1 ) is the proportionate rate of change in output due to change in input.
i.e w1 = δ(lnq)/δ(lnx1 )
= (δq/q)/(δx1/x1 )
= (δq/δx1)/(q/x1 )
= MP/AP
w1 > 1 when MP > AP
w1 = 1 when MP = AP
w1 <1 when MP < AP
Output elasticity (w1 ) is the proportionate rate of change in output due to change in input.
i.e w1 = δ(lnq)/δ(lnx1 )
= (δq/q)/(δx1/x1 )
= (δq/δx1)/(q/x1 )
= MP/AP
w1 > 1 when MP > AP
w1 = 1 when MP = AP
w1 <1 when MP < AP
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