Isoquant
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Transcript of Isoquant
BY:ATHMIKA RAO
FATHIMA SABIRAALTHAF HUSSAIN
ISOQUANT
S
ISOQUANT
Isoquant derived from Italian word
iso= equal quant= product
Geometric representation of production
funtion
Isoquant indicates various combinations
of two factors of production which give
the same level of output per unit of time.
Fixed inputs – constant in nature
ex: land, building, asset etc
Variable inputs – vary with the
environment
ex: raw material, capital and
labour
iso-quant represents 2 variable inputs
capital(k) and labour (L)
Isoquant Indifference curve
Producer goods
Output
Combination of inputs
Consumer goods
Satisfaction
Combination of commodities
Isoquant ISOQUANT
MARGINAL RATE OF TECHNICAL SUBSTITUTION
the rate at which a firm must
substitute one input for another in
order to keep production at a given
level
the rate at which capital can be
exchanged for 1 more (or less) unit of
labor
MPK = the marginal product of K
MPL = the marginal product of L
Q= MPK K + MPL L
Q= 0 along a given isosquant
MPK K + MPL L = 0
MRTS= K/ L
PROPERTIES OF AN ISOQUANT
TYPES OF ISOQUANT
Linear isoquant
Leontief isoquant
THANK YOU