Isoquant
Isoquant - Meaning and Properties * Marginal Rate of Technical Substitution * Law of Returns to Scale
Meaning
An isoquant is a firm’s counterpart of the consumer’s indifference curve. An isoquant is a curve that show all the combinations of inputs that yield the same level of output. ‘Iso’ means equal and ‘quant’ means quantity. Therefore, an isoquant represents a constant quantity of output. The isoquant curve is also known as an “Equal Product Curve” or “Production Indifference Curve” or Iso-Product Curve.”
The concept of isoquants can be easily explained with the help of the table given below:
Table 1: An Isoquant Schedule Combinations of Labor and Capital | Units of Labor (L) | Units of Capital (K) | Output of Cloth (meters) | A | 5 | 9 | 100 | B | 10 | 6 | 100 | C | 15 | 4 | 100 | D | 20 | 3 | 100 |
The above table is based on the assumption that only two factors of production, namely, Labor and Capital are used for producing 100 meters of cloth.
Combination A = 5L + 9K = 100 meters of cloth
Combination B = 10L + 6K = 100 meters of cloth
Combination C = 15L + 4K = 100 meters of cloth
Combination D = 20L + 3K = 100 meters of cloth
The combinations A, B, C and D show the possibility of producing 100 meters of cloth by applying various combinations of labor and capital. Thus, an isoquant schedule is a schedule of different combinations of factors of production yielding the same quantity of output.
An iso-product curve is the graphic representation of an iso-product schedule.
See all 12 photos
Thus, an isoquant is a curve showing all combinations of labor and capital that can be used to produce a given quantity of output.
Isoquant Map
An isoquant map is a set of isoquants that shows the maximum attainable output from any given combination inputs.
See all 12 photos
Isoquants Vs Indifference Curves
An isoquant is ‘analogous’ to an indifference curve in more than one way. The properties of isoquants are similar to the
Meaning
An isoquant is a firm’s counterpart of the consumer’s indifference curve. An isoquant is a curve that show all the combinations of inputs that yield the same level of output. ‘Iso’ means equal and ‘quant’ means quantity. Therefore, an isoquant represents a constant quantity of output. The isoquant curve is also known as an “Equal Product Curve” or “Production Indifference Curve” or Iso-Product Curve.”
The concept of isoquants can be easily explained with the help of the table given below:
Table 1: An Isoquant Schedule Combinations of Labor and Capital | Units of Labor (L) | Units of Capital (K) | Output of Cloth (meters) | A | 5 | 9 | 100 | B | 10 | 6 | 100 | C | 15 | 4 | 100 | D | 20 | 3 | 100 |
The above table is based on the assumption that only two factors of production, namely, Labor and Capital are used for producing 100 meters of cloth.
Combination A = 5L + 9K = 100 meters of cloth
Combination B = 10L + 6K = 100 meters of cloth
Combination C = 15L + 4K = 100 meters of cloth
Combination D = 20L + 3K = 100 meters of cloth
The combinations A, B, C and D show the possibility of producing 100 meters of cloth by applying various combinations of labor and capital. Thus, an isoquant schedule is a schedule of different combinations of factors of production yielding the same quantity of output.
An iso-product curve is the graphic representation of an iso-product schedule.
See all 12 photos
Thus, an isoquant is a curve showing all combinations of labor and capital that can be used to produce a given quantity of output.
Isoquant Map
An isoquant map is a set of isoquants that shows the maximum attainable output from any given combination inputs.
See all 12 photos
Isoquants Vs Indifference Curves
An isoquant is ‘analogous’ to an indifference curve in more than one way. The properties of isoquants are similar to the