ON THE RESTRICTIVE NATURE OF CONSTANT ELASTICITY DEMAND-FUNCTIONS

The very restrictive nature of systems of supply and demand functions which have constant elasticities is well known. The same is not true o f single constant own-price elasticity demand functions. This paper po ints out the extremely limiting properties implied by the assumption o f a single constant elasticity demand function. These properties restr ict the magnitude of the elasticity, and characteristics of other dema nd functions in the system.