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{"ops":[{"insert":"Consider a firm operating in a competitive output market. The firm produces output (Y) with input factors labour (L) and capital (K). Let \ud835\udc64 and \ud835\udc5f be the real prices of both inputs, respectively, so normalising the price of output to 1. The firm has a CES production function given by: \ud835\udc4c = 10(0.2\ud835\udc3e ^1\/3 + 0.8\ud835\udc3f ^1\/3 ) ^3.\n\nWhat is the definition of the elasticity of substitution? - And what is the value of the elasticity of substitution in this example\n\n"}]}
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