One of the assumptions in Euler's adding up theorem is:

Fourth, the relative shares of the factors are constant and independent of the level of the product.

Does this mean that the factors are used in fixed proportions? Does this further mean that the elasticity of substitution is 0?

If not, what is the difference between having relative shares of factors constant and fixed proportions?

  • 1
    $\begingroup$ Can you provide more context, including a link or a quote on this theorem? And are there more than 2 factors and 2 goods? $\endgroup$ – BKay Apr 4 '19 at 13:52
  • $\begingroup$ I'd like to know generally, regardless of the number of factors. A link to the theorem: economicsdiscussion.net/distributive-shares/… $\endgroup$ – WorldGov Apr 5 '19 at 7:22

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