Explain about concave isoquant, Managerial Economics

Assignment Help:

Q. Explain about Concave Isoquant?

If the isoquant is concave to origin it would mean that marginal rate of technical substitution is increasing. This behaviour is explained in Figure.

1918_Explain about Concave Isoquant.png

Figure: Concave Isoquant

It is apparent from the Figure that as labour is increased at a constant rate, amount of capital given up (ΔK) goes on increasing. Such behaviour is irrational and so isoquants aren't concave to the origin.


Related Discussions:- Explain about concave isoquant

Using factor incomes for calculating national income, Using Factor Incomes ...

Using Factor Incomes for Calculating National Income     A second method is to sum up all the incomes to individuals in the form of wages, rents, interests and profits t

Equilibrium in a single market model, Equilibrium in a single market model ...

Equilibrium in a single market model A single market model has three variables: the quantity demanded of the commodity (Q d ), the quantity supplied of the commodity (Q s ) an

The balancing item, THE BALANCING ITEM Since for ever position entry i...

THE BALANCING ITEM Since for ever position entry in the current and capital accounts there is a corresponding negative entry in the monetary account, and for every negative en

Budget planning, they manufacture a single product, specialty curry sauce. ...

they manufacture a single product, specialty curry sauce. They are interested in developing 12 MONTH budget models and want to perform decision analysis on this model. Curryrus.com

Theory of consumer behaviour, Theory of Consumer Behaviour Through the...

Theory of Consumer Behaviour Through the study of theory of consumer behaviour we can be able to explain why consumers buy more at a lower price than at a higher price or put

#Profit as a business Objective, Write on one theory of profit. Profit as r...

Write on one theory of profit. Profit as rent of ability: one of the most widely known theories of profit was propounded by F.A. Walker. According to him profit is the rent of is t

Permanent income hypothesis, What is the Permanent Income Hypothesis? What ...

What is the Permanent Income Hypothesis? What is the theory's potential relevance for assessing the effects of temporary tax cuts for the purpose of fiscal stimulus? If you were

Explain the no new substitutes for the commodity, No new substitutes for th...

No new substitutes for the commodity If some new substitutes for a commodity appear in the market, its demand normally declines. This is quite natural, since with the availabil

Explain how the firm can produce the same output, A firm is employing 100 h...

A firm is employing 100 hours of labor and 50 tons of cement to produce 500 blocks. Labor costs Rs 4 per hour and cement costs Rs 12 per ton. For the quantities employed MPL = 3 an

Salvatore, manual problems solution of demand theory

manual problems solution of demand theory

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