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Properties, Assumptions, Isoquant Map, Difference between isoquant and indifference curve

Published in: Economy & Finance
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  1. 1. 1. Iso-Product Curves Slope Downward from Left to Right
  2. 2. 2. Isoquants are Convex to the Origin. Thus it may be observed that due to falling MRTS, the isoquant is always convex to the origin.
  3. 3. 3. Two Iso-Product Curves Never Cut Each Other: Therefore two curves which represent two levels of output cannot intersect each other
  4. 4. 4. Higher Iso-Product Curves Represent Higher Level of Output:
  5. 5. 5. Isoquants Need Not be Parallel to Each Other:
  6. 6. 6. No Isoquant can Touch Either Axis:
  7. 7. An Isoquant map can be defined as the set of isoquant curves that show technically efficient combinations of inputs that can produce different levels of output.
  8. 8. Isoquant Curve Indifference Curve Related with Production theory. Related with Demand theory. Shows various combination of two inputs on an equal output. Shows the various combination of two commodities It shows constant level of output which can be measured. It shows the constant level of satisfaction which can’t be measured.
  9. 9. It represents combination of two factors. It represents combination of two commodities. It provides economic and uneconomic information region of production. It provides no information about economic and uneconomic region of consumption of goods. The slope is influenced by the technical possibility of substitution between production. {MRTS} The slope is influenced by Marginal Rate of Substitution between commodity consumed by the consumer. {MRS} Isoquant Curve Indifference Curve
  10. 10. Prepared by: Manan Saxena !! B.Com Hon Accounts ‘C’