Inhoudsopgave
What are known as iso-product curve or isoquants?
An isoquant is a curve that shows 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.”
What is ISO-Quant and ISO-cost curve?
Isocost curve is a producer’s budget line while isoquant is his indifference curve. Isoquant is also called as equal product curve or production indifference curve or constant product curve. Isoquant indicates various combinations of two factors of production which give the same level of output per unit of time.
Why is isoquant curve convex to the origin?
Isoquants are convex to the origin because of Marginal Rate of Technical Substitution (MRTS). Isoquant curve is a negatively sloped curve because when the quantity of capital is increased, the quantity of labor should be reduced so as to keep the same level of output.
What are the characteristics of isocost?
– There are two factor inputs labour and capital – The proportions of factor are variable. – Physical production conditions are given – The Scale of operation is variable – The state of technology remains constant
What is ISO-Quant curve?
Isoquant Curve Definition. An isoquant is a curve showing all possible combinations of inputs physically capable of producing a given level of output.
What is isoquant in economics?
The isoquant shows the whole range of alternative ways of producing the same level of output”. The modern economists are using isoquant, or “ISO” product curves for determining the optimum factor combination to produce certain units of a commodity at the least cost.