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Iso quants
The document discusses iso-quants, which represent combinations of two inputs that produce the same level of output. Iso-quant curves slope downward and are convex, showing efficient combinations of inputs. The marginal rate of technical substitution measures how one input can substitute for another while maintaining output. Iso-product schedules and maps show multiple iso-quant curves representing different output levels. Iso-cost lines represent combinations of inputs a producer can acquire given their budget at fixed input prices.
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Iso quants
- 1. ISO-QUANTS JITHIN K THOMAS BerchmansInstitute of Management Studies
- 2. ISO-QUANTS • Iso =equal • Quant = quantity • Iso - Quant = equal quantity = equal output
- 3. Iso-quant Curve • Iso-quantcurve is that curve which shows the different combinations of two factors yielding the same total product.
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- 5. Iso-quant Curve • Assumptions –Two factors of production – Divisible factor – Constant technique – Possibility of Technical substitution – Efficient combinations
- 6. Iso-product Schedule • Iso-productSchedule shows the different combinations of two inputs that yield the same level of output. • Iso-product Map shows a set of Iso-product curves.
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- 8. Properties of Iso-ProductCurves • Iso-Product Curves slopes downwards from left to right • Isoquants are convex to the origin • Two Iso-Product curves never cut each other • Higher Iso-Product curves represent higher level of output • Isoquants need not be parallel to each other • No isoquant can touch either axis • Each isoquant is oval – shaped
- 9. Marginal Rate ofTechnical Substitution • Marginal Rate of Technical Substitution is the rate at which one input can be substituted for another input without changing the level of output. • Iso-quant Schedule Combination labour Capital MRTS Output 1 5 9 - 100 2 10 6 3:5 100 3 15 4 2:5 100 4 20 3 1:5 100
- 10. Iso-Cost Line • Itis a locus of all combination of two or more inputs which the producer’s budget can buy using his fixed outlay at fixed input pries .
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