<p>The theory you are referring to is known as the &quot;Agnostic Elasticity of Substitution&quot; theory or the &quot;Constant Elasticity of Substitution&quot; theory. According to this theory, the sum of the elasticities of substitution between different goods in an economy is equal to one.</p>
<p>To test this theory, you need to calculate the elasticities of substitution for each pair of goods and then sum them up. The elasticity of substitution measures the responsiveness of the quantity demanded of one good to a change in the relative price of another good.</p>

CC BY-SA 4.0
2023-06-05T22:11:55.350Z
thanks for responding, i think the questions is asking about the elasticity price so is it related to the theory you mentioned?
Hazem Khaled
CC BY-SA 4.0
2023-06-07T19:43:21.003Z
Can you provide a source for "agnostic elasticity of substitution"?  I just tried googling it and obtained precisely one hit - on your answer above.
Adam Bailey
CC BY-SA 4.0
2023-06-05T21:48:23.467Z
2023-06-05T21:48:23.467Z
David Grover
<p>i have a question so that the answer can help me a lot in completing my graduation project.
a microeconomic theory (to be checked) can predict that the sum of the
three elasticities of the price of non-durable goods, the price of durable goods and the price of services, must be equal to one.  Can you test this theory?  Explain.
anyone knows what is the name of this theory?</p>

<microeconomics>
elasticity microeconomics
Hazem Khaled
# elasticity microeconomics

(Asked by: username_0 on 2023-06-05)

i have a question so that the answer can help me a lot in completing my graduation project.
a microeconomic theory (to be checked) can predict that the sum of the
three elasticities of the price of non-durable goods, the price of durable goods and the price of services, must be equal to one. Can you test this theory? Explain.
anyone knows what is the name of this theory?

**Tags:** microeconomics


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## 1 answers

### Answer by username_1 on 2023-06-05. Score: 0

The theory you are referring to is known as the "Agnostic Elasticity of Substitution" theory or the "Constant Elasticity of Substitution" theory. According to this theory, the sum of the elasticities of substitution between different goods in an economy is equal to one.

To test this theory, you need to calculate the elasticities of substitution for each pair of goods and then sum them up. The elasticity of substitution measures the responsiveness of the quantity demanded of one good to a change in the relative price of another good.

> **Comments:**
> **username_0**: thanks for responding, i think the questions is asking about the elasticity price so is it related to the theory you mentioned?  
> **username_2**: Can you provide a source for "agnostic elasticity of substitution"?  I just tried googling it and obtained precisely one hit - on your answer above.  

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