Search results with tag "Of substitution"

An Assessment of CES and Cobbs-Douglas Production Functions

wage rate will equal the marginal contribution from an additional worker and the return on capital will match the contribution in output that a marginal increment of capital provides. The elasticity of substitution can now be written as σ = %∆(K/L) %∆(w/r) = ∂ln(K/L) ∂ln(w/r) (5) where w is the wage rate and r is the rental rate of ...

  Rates, Substitution, Marginal, Of substitution