Abraham, Filip (contributor); Konings, Jozef (contributor); … - 2007
itititit
KMLQ ,,, and
it
A respectively.
X
ε is the elasticity of output with respect to input X , namely
Q
X
X
Q
X
δ
δ
ε … = :
( )
ititititititMitititLititit
akkmklkq Δ+Δ+−Δ+−Δ=−Δ λααμ )()()(
,,
(5)
6
Where
it
it
it
MC
P
=μ or the mark-up at the output market and
X …
α is the cost share in
total revenue of input X , i.e.
PQ
XP
X
(X=L,M,K). We can also rewrite (5) in terms of
the …