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49:. If the coefficient of output elasticity is greater than 1, then production is experiencing increasing returns to scale. If the coefficient is less than 1, then production is experiencing decreasing returns to scale. If the coefficient is 1, then production is experiencing constant returns to scale. Note that returns to scale may change as the level of production changes.
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A different usage of the term "output elasticity" is defined as the percentage change in output per one percent change in
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If the production function contains only one input, then the output elasticity is also an indicator of the degree of
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represents the inputs and Q, the output. Multi-input-multi-output generalisations also exist in the literature.
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or production of a single firm) divided by the percentage change of an input. It is sometimes called
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121:{\displaystyle E_{Q}={\frac {\partial Q}{\partial {\textbf {x}}}}\cdot {\frac {\textbf {x}}{Q}}}
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the inputs. The coefficient of output elasticity can be used to estimate returns to scale.
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to clarify that it refers to the change of only one input.
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264:"A Note on Equivalences in Measuring Returns to Scale"
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Microeconomics Theory & Applications with
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27:is the percentage change of output (
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274:(1): 85–89.
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