What is the shape of the isoquant when inputs are perfect substitutes?
The isoquants of a production function for which the inputs are perfect substitutes are straight lines, so the MRTS is constant, equal to the slope of the lines, independent of z1 and z2.
Which isoquant has perfect substitutability?
parallel straight lines
The isoquants for perfect substitutes are parallel straight lines. The isoquants for perfect complements are in the form of an L. Convex technology is much more common in practice.
Which type of isoquant curve is observed in case of perfect complements?
If the two inputs are perfect complements, the isoquant map takes the form of fig. B; with a level of production Q3, input X and input Y can only be combined efficiently in the certain ratio occurring at the kink in the isoquant. The firm will combine the two inputs in the required ratio to maximize profit.
Can isoquant be a straight line?
Isoquants are curves that represent efficient blend of different inputs such as labor and capital which yield the same (iso) level of output (quantity). When both inputs are perfect substitutes, isoquants are straight line and have a constant slope because one input can be replaced with the other at the same rate.
Why isn’t the isoquant curve a straight line?
Isoquants are usually downward sloping convex curves whose shape depend on the degree of substitution between different inputs. When both inputs are perfect substitutes, isoquants are straight line and have a constant slope because one input can be replaced with the other at the same rate.
What is equal product curve?
equal product curve represents all those combinations of two inputs which are capable of producing the same level of output. The Fig. 1 shows the various combinations of labour and capital which give the same amount of output.
Can an isoquant ever slope upward?
Isoquant curve can never slope upward. If both inputs used in the production are capital and labor for an increase in wealth and employment in return…
What does a curved isoquant mean?
An isoquant curve is a concave-shaped line on a graph, used in the study of microeconomics, that charts all the factors, or inputs, that produce a specified level of output. The isoquant curve assists companies and businesses in making adjustments to inputs to maximize production, and thus profits.
What is ISO cost curve?
An isoquant curve is a concave line plotted on a graph, showing all of the various combinations of two inputs that result in the same amount of output. Most typically, an isoquant shows combinations of capital and labor and the technological trade-off between the two.