Holding quantity constant-the elasticity of labor with respect to wages equals L=(ai7ab17a()17a+bag 21+a and >aa 17a b 17aR1aW17aalab17a(w)17a+60 W "靠 1?a a7ablaR1aW 7a +1 This is increasing with a, decreasing with b, increasing with W and decreasing with r If the terms in the denominator don ' t move too much with a, then as a rises, the elasticity rises- this is Marshalls substitutability pointHolding quantity constant– the elasticity of labor with respect to wages equals: L = a 1 1?a b ?a 1?a W R a 1?a + b ? 1 a Q /L /W = 1 1?a a 1 1?a b ?a 1?a R ?a 1?a W 2a?1 1?a a 1 1?a b ?a 1?a W R a 1?a + b ? 1+a a Q and W L /L /W = 1 1 ? a 1 a ?1 1?a b 1 1?a R a 1?a W ?a 1?a + 1 This is increasing with a, decreasing with b, increasing with W and decreasing with R. If the terms in the denominator don’t move too much with a, then as a rises, the elasticity rises– this is Marshall’s substitutability point