Wilson Company Economic Interpretation

Wilson Company Economic Interpretation

Wilson Company Economic Interpretation

Standard economic theory assumes that the markets of the production factors capital, labor, and energy operate in an equilibrium state, where the cost share of each production factor is equal to its output elasticity, which reflects the productive power of the respective factor. In this equilibrium producers supposedly can maximize profit without any technological constraints on factor combinations.

In order to substantiate the understanding of economic growth as a process subject to technological constraints that originate from limits to capacity utilization and automation, it is desirable to check the output elasticities by a ...