Elasticity of technical substitution

Elasticity of technical substitution,

Definition of Elasticity of technical substitution:

  1. Responsiveness of a firm to price changes in the substitute of an input. It is measured as the ratio of proportionate-change in the relative quantity of two inputs to the proportionate-change in their relative prices. Elasticity of technical substitution shows to what degree two inputs can be substitutes for one another.

Meaning of Elasticity of technical substitution & Elasticity of technical substitution Definition