Department of commerce OUTLINE 1MEANING 2 DEFINITION 3 PRINCIPLE OF MRTS 4 SCHEDULE OF MRTS 5 ASSUMPTION OF ISOQUANT 6SCHEDULE OF ISOQUANT 7PROPERTIES OF ISOQUANT 8 SIGNIFICANCE OF ISOQUANT ID: 1028433
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1. BUSINESS ECONOMICS BYPROF. GAYATHRI IYENGAR(Department of commerce)
2. OUTLINE1.MEANING2. DEFINITION3. PRINCIPLE OF MRTS4. SCHEDULE OF MRTS5. ASSUMPTION OF ISOQUANT6.SCHEDULE OF ISOQUANT7.PROPERTIES OF ISOQUANT8. SIGNIFICANCE OF ISOQUANTISOQUANT
3. ISOQUANT=ISO PRODUCT CURVE COMBINATION OF TWO WORDS ISO=EQUAL QUANT =QUANTITYLOCUS OF THE POINT REPRESENTING VARIOUS COMBINATION COMBINATION= TWO INPUT (CAPITAL, LABOUR)ONE FACTOR ↓ ANOTHER ↑ OUTPUT →MEANING OF ISOQUANT
4. “Isoproduct curve represents all possible combinations of two factor that will give the same total product” KEIRSTEADIn short we can say that an isoquant is a curve on which the various combinations of labour and capital show the same output.DEFINITION
5. Full form- Marginal rate of technical substitutionIt indicates the rate at which factor can be substituted.Substitution– “as the resources are limited and wants are unlimited”.Substitution leads the same yield.Principles of MRTS
6. FACTOR COMBINATIONLABOUR (X)CAPITAL (Y)OUTPUTMRTSA11550-B212503:1C3105O2:1D49501:1MRTS SCHEDULE
7. Only two factor of productionSubstitution of factorsTechnology remains constantFactor of production can be divided into various proportionsFOP’s can be used in most efficient useAssumptions of isoquant
8. FACTOR COMBINATIONLABOURCAPITAL OUTPUTA115200B212200C310200D49200SCHEDULE OF ISOQUANT
9. NEGATIVE SLOPECONVEX TO ORIGINNO ISOQUANT CAN INTERSECT EACH OTHERISOQUANT LYING ABOVE REPRESENT HIGHER LEVELNO ISOQUANT SHOULD BE PARALLELISOQUANT NEVER TOUCHES EITHER AXIS PROPERTIES OF ISOQUANT
10. GRAPHS
11. TO MINIMIZE COST OF PRODUCTION.IT ILLUSTRATE ALL POSSIBLE COMBINATION.TO DETERMINE PRODUCERS BUDGET LINE.HELPS IN FIRMS DECISION MAKING.SIGNIFICANCE OF ISOQUANT
12.