# Scale Elasticity watch

1. I need some help again :P Hopefully someone can answer my questions this time ^^

-- Explain the concept of scale elasticity.

I know the basic definition is : % Change in output / % change in input

But how would I expand upon this?

-- Show how Cobb-Douglas function can be used to provide information abouts a firms "returns to scale"

I understand how we get from: Q = (L^a) * (K^b) to dQ/dL = [aL^(a-1)] * (K^b)

But how do I convert it to a+b is =,> or < 1 to gain the scale elasticity. I think it is something to do with the Elasticity of L and K being MPx / APl = elasticity of output.

Not sure tbh, lots of rep availible ^^

2. I'm not sure what 'scale elasticity' is but for the question about returns to scale you can just do something like:

Given production function:

For constant returns to scale:
Substitute in production function:

For decreasing returns to scale:

For increasing returns to scale:

Hope this helps.

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