ISOQUANTS
DEFINITION
Isoquant (derived from quantity and the Greek word iso, meaning equal) is a contour line joining the set of all points at which a quantity of output is produced while varying quantities of two and/or more inputs. An indifference curve mapping helps us to arrive at the utility-maximization of consumers, the isoquant mapping deals with the cost-minimization of producers. Isoquants are ideally drawn alongside isocost curves in capital-labour graphs, showing the technological trade-off between capital and labour in the production function, and also the decreasing marginal returns of both inputs. Increasing one input while holding the other one constant inevitably leads to decreasing marginal output, and this is reflected in the shape of …show more content…
ISOQUANTS VS INDIFFERENCE CURVES
An isoquant is ‘analogous’ to an indifference curve in more than one way. The properties of isoquants and the properties of indifference curves are quite similar. However, some of the differences should also be noted. Firstly, in the indifference curve technique, utility cannot be measured at all. In the case of an isoquant, the product can be exactly measured in physical units. Secondly, in the case of indifference curves, we can explain about higher or lower levels of utility. In the case of isoquants, we can substantiate by how much IQ2 actually exceeds IQ1. This can be clearly identified from the above figure.
ISOQUANTS-PROPERTIES
1. An isoquant lying above and to the right of another isoquant gives a higher level of output.
This is because of the reason that on a higher isoquant, we have either more units of a particular factor of production or more units of both the factors. This can be figured out from figure 3. In figure 3, points A and B are on the isoquant IQ1 and IQ2respectively.
At point A it is = OX1 units of Labour and OY1 units of
DEFINITION
Isoquant (derived from quantity and the Greek word iso, meaning equal) is a contour line joining the set of all points at which a quantity of output is produced while varying quantities of two and/or more inputs. An indifference curve mapping helps us to arrive at the utility-maximization of consumers, the isoquant mapping deals with the cost-minimization of producers. Isoquants are ideally drawn alongside isocost curves in capital-labour graphs, showing the technological trade-off between capital and labour in the production function, and also the decreasing marginal returns of both inputs. Increasing one input while holding the other one constant inevitably leads to decreasing marginal output, and this is reflected in the shape of …show more content…
ISOQUANTS VS INDIFFERENCE CURVES
An isoquant is ‘analogous’ to an indifference curve in more than one way. The properties of isoquants and the properties of indifference curves are quite similar. However, some of the differences should also be noted. Firstly, in the indifference curve technique, utility cannot be measured at all. In the case of an isoquant, the product can be exactly measured in physical units. Secondly, in the case of indifference curves, we can explain about higher or lower levels of utility. In the case of isoquants, we can substantiate by how much IQ2 actually exceeds IQ1. This can be clearly identified from the above figure.
ISOQUANTS-PROPERTIES
1. An isoquant lying above and to the right of another isoquant gives a higher level of output.
This is because of the reason that on a higher isoquant, we have either more units of a particular factor of production or more units of both the factors. This can be figured out from figure 3. In figure 3, points A and B are on the isoquant IQ1 and IQ2respectively.
At point A it is = OX1 units of Labour and OY1 units of