I have data for a business firm for two periods. The data include: output (Q), capital (K), labor (L), wage (W) and the rental rate of capital (R). Here they are:
Period K L W R Q 1 30 50 200 100 500 2 40 55 180 90 510
I need to find wage elasticity of demand, and, assuming "the same mathematical relationship exists for capital" (it is formulated in the task this way), rental elasticity of demand.
I have no idea how to handle this and need some direction, please. I know that wage elasticity of demand should be %change in labor / %change in wage, and rental elasticity of demand should be %change in labor / %change in rental rate of capital. However, it seems in this case it is not possible to apply these formulas right away.
I believe that it might be reasonable to compare labor L, wage W and rental rate of capital R using the same volume of output (Q). However, the production function is not given, so I have no idea how to arrive to comparable outputs.
I found that for equilibrium cases in the long run MP(L)/MP(K) = W/R. Moreover, W/R is the same in both periods, so it might be used for finding the answer. But I have no clues what to do further. Would be extremely grateful for any advice and direction.