Economics (NCERT) Notes

3.2 Isoquant

Isoquant
•‘Iso’ means equal and ‘quant’ means quantity.
•An isoquant is a curve that shows all the combinations of inputs that yield the same level of output.
•An isoquant is a firm’s counterpart of the consumer’s indifference curve.
•Thus, an isoquant represents a constant quantity of output.
•The isoquant curve is also known as
     •“Equal Product Curve” or
     •“Production Indifference Curve” or
     •Iso-Product Curve.”
 
Isoquant And Production Function
•In this Table, the output of 10 units can be produced in 3 ways (4L, 1K), (2L, 2K), (1L, 4K).
•All these combination of L, K lie on the same isoquant, which represents the level of output 10.  
 
Isoquant Map 

•An isoquant map is a set of isoquants that shows the maximum attainable output from any given combination inputs.
•Consider a production function with two inputs labour and capital.
•We place L on the X axis and K on the Y axis.
•We have three isoquants for the three output levels, namely q = q1, q = q2 and q = q3.
•Each isoquant represents a particular level of output and is labelled with that amount of output.
 
Isoquant Map are negatively slopped
•Two input combinations (L1, K2) and (L2, K1) give us the same level of output q1.
•If we fix capital at K1 and increase labour to L3, output increases and we reach a higher isoquant, q = q2.
•When marginal products are positive, with greater amount of one input, the same level of output can be produced only using lesser amount of the other.
•Therefore, isoquants are negatively sloped.
 
Isoquants Vs Indifference Curves
•The properties of isoquants are similar to the properties of indifference curves.
•However, some of the differences are:-
     •In the indifference curve technique, utility cannot be measured, while in the case of an isoquant, the product can be precisely measured in physical units.
     •In the case of indifference curves, we can talk only about higher or lower levels of utility, while in the case of isoquants, we can say by how much q2 actually exceeds q
 
Properties of Isoquant Curves
•An isoquant lying above and to the right of another isoquant represents a higher level of output.
•Two isoquants cannot cut each other
•Isoquants are convex to the origin
•No isoquant can touch either axis
•Isoquants are negatively sloped

 




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