Economic essays

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Monograph

Identifikator:: 1753623200

URN:: urn:nbn:de:zbw-retromon-136107

Document type:: Monograph

Title:: Economic essays

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1927

Scope:: viii, 368 S.; Ill., graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

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Title:: Elasticity of supply as a determinant of distribution / Paul H. Douglas

Collection:: Economics Books

112 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK effect of (1) its relative elasticity of supply and (2) its share of the total product can be obtained by multiplying the former by the ratio of the share of the other to the one in question. Thus, if the elasticity of X were .5 and if it received one-third and Y two-thirds of the total product, then the relative change in the quantity of X, which an increase in the return to each unit of Y would occasion, would be the same as that caused by 2 ) 3 an elasticity of supply of 1.0 for X (ie. .5x—=.5%x2 = 1.0). 1 [3 If X received but one-fourth of the total product, it would be 3 4 identical with an elasticity of 1.5 i.e, .5 x — 1 1 Where, however, there is an increase or decrease in the net effectiveness of industry, both factors will tend initially to be affected to the same relative degree whatever may have been the share of the total product which each originally received. For a decline of five percent in the total product would virtually tend to be distributed over the factors in the same proportion which each originally secured, let us say in the ratio of two-thirds and one-third, and this would mean that the remuneration per unit would decline by five percent for each factor. An increase in the net effectiveness of industry of a given percentage would also tend to be initially reflected for both factors in equal percentage increases in reward per unit. In these cases, therefore, the relative proportion of the product secured by the factors does not affect the final result. The relative elasticity of supply will determine the nature and degree of the alterations in the supply which a given change in effective- ness will create and consequently will shape the ultimate equi- librium which will be established. 9. Other Factors But there are still other forces which must be plumbed and whose influences upon distribution must be analyzed. The most

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