Production 2
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1. Isoquants slope downwards from left to right and never cut, touch, or intersect each other. 2. Isoquants are convex to the origin, meaning that marginal rate of technical substitution of inputs decreases as one moves away from the origin. 3. A profit maximizing producer aims to minimize costs by securing the optimal combination of factors of production based on technical possibilities and input prices.
![PROPERTIES OF ISOQUANTS ,[object Object],A B F D O X Y Y 2 Y 1 X 1 X 2](https://image.slidesharecdn.com/production2-120110025611-phpapp01/85/Production-2-1-320.jpg)
![[object Object],Y O Y Y C X O O X X A A A B B B C C FIGURE-1 FIGURE-2 FIGURE-3](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
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Production 2
- 3. Isoquants are covex to the Origin
- 4. ECONOMIC REGION OF PRODUCTION Y A 1 A 2 A 3 A 4 B 1 B 2 B 3 B 4 IQ 1 IQ 2 IQ 3 IQ 4 X O LABOUR CAPITAL
- 6. ISO-COST LINE Rs. 200 Rs. 300 Rs. 400 80 60 10 20 30 40 40 20 O Y X B D F A C E
- 7. PRODUCER’S EQUIBRIUM Capital O Y X O Y X Labour E 1 C D F H E IQ 2 U T G R P Q IQ E 2 IQ 3 IQ 1 A B Capital Labour Figure-1 Figure-2
- 8. EXPANSION PATH G E B A F H C D O Y X Expansion Path E 1 E 2 E 3 E 4