Final answer:
The elasticity of output with respect to capital measures the percentage increase in output from a 1% increase in capital stock, not the inverse of labor elasticity or a value necessarily greater than one.
Step-by-step explanation:
The elasticity of output with respect to capital is an important concept in economics, particularly in the study of production functions within the field of microeconomics.
The correct definition corresponding to the student's question is that this type of elasticity measures the percentage increase in output resulting from a 1% increase in the capital stock.
This concept is not to be confused with the inverse of the elasticity of output with respect to labor or any assumption that it is always greater than one.
Instead, it serves to identify how production is affected by changes in the amount of capital a firm uses. It is a critical factor in understanding how businesses can grow and become more productive through investment.