1. These variables enter the above elasticity expressions only as a fraction * 2 /( + ), and neither nor affect the expression in any other way. Hence, the effect of an increase in demand on the elasticity can be evaluated by calculating the derivative of the above expression with respect to * 2 /( + );We now examine whether the elasticity increases in product demand (due to increase in or decrease in ) for a given ability , with the remaining model parameters fixed
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