Slope of an iso-quant, Microeconomics

Assignment Help:

Slope of an Iso-quant:

Since along an iso-quant the level of output remains the same, if θL units of θL are substituted for K units of K, the increase in output due to θ L units θ L (namely, θ L.MPL) should match the decrease in output due to a decrease of K units of K (namely θ K.MPK). In other words,  

1379_Slope of an Iso-quant.png

when  is a very small amount we can write 2323_Slope of an Iso-quant1.png. In the K - L input space, dK/dL represents the slope of the iso-quant at any point on it. 

θ Slope of the iso-quant 849_Slope of an Iso-quant2.png

The absolute value of dK/dL, denoted by |dK/dL| is known as the marginal rate of technical substitution of L for K. (MRTSLK). By definition, it measures the reduction in one input per unit increase in the other that is just sufficient to maintain a constant level of output. It is equal to the ratio of the marginal product of L to the marginal product of K.  


Related Discussions:- Slope of an iso-quant

Point elasticity, Point Elasticity: Point elasticity is brought in use ...

Point Elasticity: Point elasticity is brought in use when the change in price is quite small, which means. The two points between which elasticity is being measured or calculat

Estimation of national income, ESTIMATION OF NATIONAL INCOME: In India...

ESTIMATION OF NATIONAL INCOME: In India, the first attempt to estimate national income and per capita income was made in the year 1867-68 by Shri Dadabhai Naoroji. This was fo

Help, In a competitive market, the market demand is Qd = 150 - 5P and the m...

In a competitive market, the market demand is Qd = 150 - 5P and the market supply is Qs = 5P - 10. As a result of a price ceiling imposed at $14, the new consumer surplus and produ

Describe customer-firm relationship, Question 1: "The rush of new and e...

Question 1: "The rush of new and existing enterprises to exploit the opportunities presented by the internet economy is giving rise to new business models". Discuss. Ques

Determines price and output in the long run, Problem 1: (a) Differentia...

Problem 1: (a) Differentiate between positive and negative externalities? Justify your answer using examples. (b) To what extent do government policies influence externali

Price elasticity, Price Elasticity A measure of the change in demand fo...

Price Elasticity A measure of the change in demand for a product relative to unit changes in the price of the product. If the percentage change in quantity demanded is greater

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