Iso-Quant Curve: Definitions, Assumptions and Properties! The term Iso-quant or Iso-product is composed of two words, Iso = equal, quant = quantity or product. The term ‘isoquant’ is composed of two terms ‘iso’ and ‘quant’. Iso is a Greek word which means equal and quant is a Latin word which means. Property 2: An isoquant curve, because of the MRTS effect, is convex to its origin. This indicates that factors of production may be substituted.

Author: Galmaran JoJosida
Country: Venezuela
Language: English (Spanish)
Genre: Relationship
Published (Last): 7 October 2006
Pages: 178
PDF File Size: 13.88 Mb
ePub File Size: 15.90 Mb
ISBN: 663-7-19335-186-8
Downloads: 45052
Price: Free* [*Free Regsitration Required]
Uploader: Voodooramar

It will unnecessarily increase the cost of production. Isoquant – Meaning and Properties Updated on June 10, In figure 4, the isoquant IQ 1 shows units of output produced by various combinations of labor and capital and the curve IQ 2 shows units of output.

Iso-Quant Curve: Definitions, Assumptions and Properties

pfoperties ComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. While using ON 3 amount of land, at point C, if more than OL 3 units of labour are used, total output will be less than 60 quintals of wheat. The output can only be increased if there is no increase in the cost of the factors. No data is shared with Facebook unless you engage with this feature.

Properties of Iso-quant curve

It can be explained with the help of an example. No data is shared with Paypal unless you engage with this feature. Which of the optimum combinations of factors will be used by the firm is known as Expansion Path.

Please choose which areas of our service you consent to our doing so. They give the boundary of the economic region of production. From F to G additional units of output is obtained by employing only 10 more units of labour. MRTS is the loss of certain units of capital which will just be compensated for by additional units of labour propertues that point.

  HP 4275A MANUAL PDF

Iso-Quant Curve: Definitions, Assumptions and Properties

If the financial resources of the firm further increase, but cost of factors remaining the same, the new iso-cost line will be GH. This is used to provide traffic data and reports to the authors of articles on the HubPages Service.

This means an increasing marginal product of labour. Both curves IQ1 and IQ2 represent two levels of output. The horizontal straight line RP is drawn on the assumption that capital is kept constant at OR and production expanded by adding more labour.

Therefore, the curve is downward sloping from to right. Point A indicates 5 units of capital and no unit of labour, while point D represents 10 units of labour and no unit of capital. The parallelism of isoquant curves depend upon the MRTS.

Thus, an isoquant prolerties is a schedule of different combinations of factors of production yielding the same quantity of output. Very easy to understand and i like the explanation that’s given.

Isoquants: Meaning, Assumptions and Properties – Businesstopia

Figure 13 A shows three iso-cost curves each represents a total outlay of 50, 75 and respectively. An isoquant lying above and to the right of another isoquant represents a higher level of output. Iso is a Greek word which means equal and quant is a Latin word which means quantity. This is used to provide data on traffic to our website, all personally identifyable data is anonymized.

Each isoquant is oval-shaped An important feature of an isoquant is that it enables the firm to identify the efficient range of production consider figure This is a cloud services platform that we used to host our service. These points have been joined by OR ridge line. Just as there are various isoquant curves, so there are various iso-cost lines, corresponding to different levels of total output.

  JOSQUIN DESPREZ AVE MARIA PDF

Further suppose that a unit of labour cost the producer Rs. To put it differently, as more units of labour are used, and as certain units of capital are given up, the marginal productivity of labour in relation to capital will decline. It means that at some point it begins to recede from each axis. At this point, the slope of the iso-cost line is equal to the iso-product curve.

This means that units increase in output can be obtained by employing successively lesser increments of labour. If one of propreties factors becomes relatively dearer, the iso-cost line will contract inward to the left.

When the amount of capital is increased, the level of output must increase. A rational producer will chose this combination of factors, given prooerties factor prices.

You can use this to streamline signing up for, or signing in to your Hubpages account. We can also see that the combination A lies on Iq 1 and combination B lies on Iq 2.

Hence, it is proved that a higher isoquant shows a higher level of output. This can be illustrated with the help of a diagram as in figure 4. Slope of an iso-quant curve is influenced by the technical possibility of substitution between factors of production. As financial resources of a firm increase, it would like to increase its output.

The downward sloping iso-product curve can be explained with the help of the following figure: Each isoquant curve is a representation of particular level of production.