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On the Restrictive Nature of Constant Elasticity Demand Functions

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Evans, Lewis

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Abstract

The very restrictive nature of systems of supply and demand functions that have constant elasticities is well known. The same is not true of single constant own-price elasticity demand functions. This paper points out the extremely limiting properties implied by the assumption of a single constant elasticity demand function. These properties restrict the magnitude of the elasticity and characteristics of other demand functions in the system. Copyright 1994 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

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Publisher Info
Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 35 (1994)
Issue (Month): 4 (November)
Pages: 1015-18
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Handle: RePEc:ier:iecrev:v:35:y:1994:i:4:p:1015-18

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