Show the properties of isoquants, Managerial Economics

Assignment Help:

Q. Show the Properties of isoquants?

Isoquants slope downwards to the right:  It means that, in order to keep output constant; when amount of one factor is increased then the quantity of other factor should be decreased.

An upward sloping isoquant illustrates that a given product can be produced with less of both the factors of production. An entrepreneur, who is maximising profits, wouldn't use any combinations of factors exposed on an upward sloping portion of an isoquant. Thus the points on the upward sloping portion of an isoquant can't represent an equilibrium position. In the same way, a horizontal or vertical range of an isoquant cannot also represent a possible position of equilibrium. In this circumstance, the same output could be attained at a reduced cost by decreasing the amount of one of the factors. So isoquants slope downwards to the right as in figure below.

2407_Show the Properties of isoquants.png

Figure: Isoquant sloping downwards


Related Discussions:- Show the properties of isoquants

Components of demand forecasting system, Market research operations to obta...

Market research operations to obtain reliable and relevant information about the trends in market. A data analysing and processing system to estimate as well as evaluate the s

Explain the leibenstein model, Q. Explain the Leibenstein model? Leiben...

Q. Explain the Leibenstein model? Leibenstein (1966) sees a firm's norms or conventions, dependent on its history of management initiatives, labour relations and other  factors

Utility, Utility Utility is the amount of satisfaction derived from th...

Utility Utility is the amount of satisfaction derived from the consumption of a commodity or service at a particular time.  Utility is not inherent but a psychological satisfa

Real rigidities, Real Rigidities The New Keynesian economists  rely bo...

Real Rigidities The New Keynesian economists  rely both on nominal and real rigidities to  arrive at their conclusion that nominal changes in money  supply have real, and not

Write internal and external factors of business operation, Internal and Ex...

Internal and External factors of business operation External factors : A firm can't exercise any control over these factors. Thepolicies, plans and programmes of the firm m

Game theory, game theory matrix dominant strategy

game theory matrix dominant strategy

Average revenue (ar), Average Revenue (AR) This is the revenue per uni...

Average Revenue (AR) This is the revenue per unit of the commodity sold.  It is obtained by dividing Total Revenue by total quantity sold.  For a firm in a perfectly competiti

Comprehesive Compectitive Impact Summary U.S. retail firm, U.S. retail indu...

U.S. retail industry, Arc Elasticity is correctly used to assess the dollar magnitude of net benefits of a decision to raise price/output combinations by 5% in the short and medium

Determine a specific price of demand of product, Determine a Specific Price...

Determine a Specific Price of demand of product A proclamation concerning the demand of a product without mentioning its price is worthless. For instance, to state that demand

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