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

Show the long term goals - demand forecast, Q. Show the Long Term Goals - D...

Q. Show the Long Term Goals - Demand forecast? Long Term Goals:   If the demand forecast period is more than a year, in that scenario it's termed as long term forecast. Follow

LIne balancing, what is line balancing for paper machine?

what is line balancing for paper machine?

Aggregate demand, AGGREGATE DEMAND This refers to the total planned or...

AGGREGATE DEMAND This refers to the total planned or desired spending in the economy as a whole in a given period. It is made up of consumption demand by individuals, planned

Illustrate about sales maximisation, Q. Illustrate about Sales maximisation...

Q. Illustrate about Sales maximisation? The concept that business firms (specifically those operating in the real world) are principally goaded by the aspiration to achieve the

Classification of taxes, CLASSIFICATION OF TAXES Taxes can be classifi...

CLASSIFICATION OF TAXES Taxes can be classified on the basis of: a.     Impact of the taxes It means on whom the tax is imposed.   On the other hand, incidence of the

Neoclassical thinking, neoclassical thinking assumes that all firms are est...

neoclassical thinking assumes that all firms are established to make profit has been challenged by managerial discretion model.How successful have been these models to maximize pro

General and selective credit control, General and Selective Credit Control ...

General and Selective Credit Control These are imposed with the full apparatus of the law or informally using specific instructions to banks and other institutions.  For insta

Statistical signigicance, A study of 86 savings and loan associations in si...

A study of 86 savings and loan associations in six northwestern states yielded the following cost function. I''ve been given the following data; C=2.38- .006153Q1 + .000005359Q2 +

What do you mean by kinked isoquant, Q. What do you mean by Kinked Isoquant...

Q. What do you mean by Kinked Isoquant? This isoquant presumes only limited substitutability of labour andcapital. There are just a few processes for generating any one commodi

Define profit maximisation theory, Q. Define Profit maximisation theory? ...

Q. Define Profit maximisation theory? Profit maximisation theory defines that firms (corporations orcompanies) will establish factories where they see potential to achieve the

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