The elasticity of substitution is the
A. change in the price of capital over the change in the price of labor.
B. change in capital over the change in the price of labor.
C. percentage change in capital over the percentage change in labor.
D. percentage change in the price of capital over the percentage change in the price of labor.
E. percentage change in the capital/labor ratio resulting from a 1-percent change in the relative price of labor to capital.
Answer: E
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