What is 'SCALE INVARIANCE' of the price elasticity coefficient ?

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Expert Solution

The term scale invariance is used in different disciplines like physics, mathematics, statistics and Economics.

If an object doesn't change if scales of length or other variables, are multiplied by a common factor, the object is said to have the feature of scale invariance.

In Economics, scale invariance is applied to elasticity coefficients like production elasticity coefficient and price elasticity coefficient.

Invariance of price elasticity coefficient means that, the price elasticity coefficient will be invariant to changes in scale provided that axes start from the origin.( The price elasticity coefficient won't change, if we change the scale we used for analysis.)

Rahul Sunny answered 2 years ago

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