Derivation of smooth convex isoquant, Managerial Economics

Assignment Help:

It is presumed that every of the different combinations of capital and labour displayed in Table produces the same level of output, which is, 20 units. Combinations are such that if one factor is increased other factor is decreased or vice versa. All these combinations are technically efficient.

Table: Various Combinations of Labour and Capital to Produce 20 Units of Output

Factor Combination

Labour

Capital

A

1

15

B

2

11

C

3

8

D

4

6

If we plot all these combinations as well as join them we get a curve Q. This is displayed in Figure below. 

239_DERIVATION OF SMOOTH CONVEX ISOQUANT.png

Figure: Isoquant or Equal Product Curve

Curve Q is the isoquant or equal product curve. It displays all those combinations of capital and labour that, with a given technology, produce 20 units of output. So an isoquant is locus of all those sublimations of capital andlabour that yield the same level of output. Or we can say that an isoquant comprises all the technically efficient methods of producing a given level of output.


Related Discussions:- Derivation of smooth convex isoquant

Production, Explain the theory of production, Managerial Economics Explain...

Explain the theory of production, Managerial Economics Explain the Theory of Production

Marginal utility, Marginal Utility The extra utility derived from the ...

Marginal Utility The extra utility derived from the consumption of one more unit of a good, the consumption of all other goods remaining unchanged. The hypothesis of dimin

Bain''s model of limit pricing, Bain''s limit pricing theory advantages and...

Bain''s limit pricing theory advantages and disadvantages

Ans, State the difficulties in the measurement of profit.

State the difficulties in the measurement of profit.

Stock market investors, A hypothetical AD-AS model for Canada Durin...

A hypothetical AD-AS model for Canada During the 1990s, many stock market investors in Canada became optimistic about information technology and bid up stock prices, more t

Limitations of open market operations, Limitations of Open Market Operation...

Limitations of Open Market OperationsLimitations For their success central bank open market operation assume that commercial banks in the country will expand their credit port

Types of elasticity, what are the examples of the types of elasticity (pri...

what are the examples of the types of elasticity (price,income & cross elaticity

Demand and supply, The demand for good X is estimated to be:  where p x p...

The demand for good X is estimated to be:  where p x price of X in dollars M = personal disposable income in trillions of dollars per year P y = price of a competitive in do

Excise tax and its impact on manufacturing industry, excise tax and its imp...

excise tax and its impact on manufacturing industry with respect to demand and supply curves

Total cost (tc), Total Cost (TC) This is the sum of fixed costs and va...

Total Cost (TC) This is the sum of fixed costs and variable costs i.e. TC = FC + VC.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd