market outcome is still driven by the sole variable elasticity of substitution. We impose elementary conditions on this … attention to the constant elasticity of substitution (CES) based on its normative implications was misguided: constant mark … cope with heterogeneous firms once it is recognized that the elasticity of substitution is firm-specific. Finally, we show …

general demand system. The basic tool we use to study the market outcome is the elasticity of substitution at a symmetric …