Isoquants

* Assumptions

- Food producer has 2 inputs

• Labor (L) & Capital (K)

* Observations:

 1) For any level of K, output increases with L.

 2) For any level of L, output increases with K.

 3) Various combinations of inputs produce same output.

Isoquants

- Curves which is showing all the possible combinations of inputs which yield the same output

  Production Function for Food

  Production with the Two Variable Inputs (L,K)

 

Input Flexibility

- The isoquants stress that how different input combinations can be used to produce same output.

- This information allows producer to respond efficiently to changes in markets for inputs.