All of these statements are supposed to be about Some of these comparative statics we know what to do with: (1)and(2). To get (3 and(4), we need some new ingredients (1)The demand for a good is more elastic the more readily substitutes can be obtained In the limit, this is obvious-if there exists a perfect substitute, then the derived demand elasticity is infinite Start with the Foc for an input j Differentiation gives us:花角=?>两mAll of these statements are supposed to be about Wj Zj /Zj /Wj Some of these comparative statics we know what to do with: (1) and (2). To get (3) and (4), we need some new ingredients. (1) The demand for a good is more elastic the more readily substitutes can be obtained. In the limit, this is obvious– if there exists a perfect substitute, then the derived demand elasticity is infinite. Start with the FOC for an input j P /f /Zj = Wj. Differentiation gives us: /f /Zj /Zj /Wj = 1 P ? >i®j /f /Zi /Zi /Wj