unresolved I don’t understand this elasticity formula of and thus I don’t understand the mathematical logic of how the elasticity of employment (for a given industry or for industry at large) is determined.
This enables us to determine what amount of employment in each industry will correspond to a given level of aggregate employment. That is to say, it gives us the amount of employment in each particular industry corresponding to each level of aggregate effective demand measured in terms of wage-units, so that the conditions are satisfied for the second form of the employment function for the industry, defined above, namely Thus we have the advantage that, in these conditions, the individual employment functions are additive in the sense that the employment function for industry as a whole, corresponding to a given level of effective demand, is equal to the sum of the employment functions for each separate industry; i.e. Next, let us define the elasticity of employment. The elasticity of employment for a given industry is since it measures the response of the number of labour-units employed in the industry to changes in the number of wage-units which are expected to be spent on purchasing its output. The elasticity of employment for industry as a whole we shall write