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.
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I’m really satisfied to your explanation. The conclusion is that the isoquant cannot be a vertical straight line.
What are the properties of Iso-quant Curve? Business Jargons
If an isoquant touches the X-axis it would mean that the commodity prooperties be produced with OL units of labor and without any unit of capital.
An pdoperties is a curve that shows all the combinations of inputs that propertiez the same level of output. Point B indicates 4 units of capital and 2 units of labour.
Therefore, two isoquant curves cannot intersect. As two indifference curves cannot cut each other, two iso-product curves cannot cut each other.
Iso-Quant Curve: Definitions, Assumptions and Properties
If the financial resources of the firm further increase, but poperties of factors remaining the same, the new iso-cost line will be GH. Thus it means equal quantity or equal product.
Similarly, OC units of capital alone cannot produce anything without the use of labour. The table 1 shows that the five combinations of labour units and units of capital yield the same level of output, i. The possibilities of horizontal, vertical, upward sloping curves can be ruled out with the help of the following figure 4: Very easy propeerties understand and i like the explanation that’s given.
Satisfaction or utility cannot be measured. It obtains least cost combination of the two factors to produce 5 00 units of the commodity.
However, some of the differences may also be noted. Thus, the isoquant curve is convex to propertoes origin. Each curve refers to given quantity of output while an indifference curve to the quantity of satisfaction. Then from E to F the additional units of output are obtained by employing additional 20 units of labour. Let us explain it with the following Fig. The initial iso-cost line of the firm is AB.
It can be get very well soon Prices of factors remaining the same, if the total outlay isoqjant raised, the iso-cost curve will shift upward to the right as EF parallel to CD, and if the total outlay is reduced it will shift downwards to the left as AB. It is also known as optimum combination of the factors.
Isoquant – Meaning and Properties
Yet, two isoquant curves need not be parallel to each other. Thanks you very much sir for detailed explanation with diagram. The logic behind this is the principle of diminishing marginal rate of technical substitution. Therefore, isoquants cannot intersect. We may note that the isoquants Iq 1 and Iq 2 are parallel but the isoquants Iq 3 and Iq4 are not parallel to each other.
Increasing input units of either of the factors without deducing the input of the other factor will result in increased production and it is beyond the principle of isoquant curve. Isoquants need not be parallel The shape of an isoquant depends upon the marginal rate of technical substitution. Point K on the Y-axis implies that the commodity can be produced with OK units of capital and without any unit of labor.