Isoquant Analysis


The analysis shows various combinations of factors of production that can produce a certain amount of output.
Assumptions
• There are only 2 factors of production.
• Technology remains same.
Explanation
There are only 2 factors of production, labour and capital. Combining labour and capital produces output. The given table shows the same quantity of output that can be produced with the different combinations of these 2 inputs.

Table showing different combinations of 2 inputs producing same level of output

Combinations

Labour

Capital

Units of output

A

3

20

50

B

4

15

50

C

6

10

50

D

10

6

50

E

15

4

50

F

20

3

50



The above table , displayed in the form of a curve would look like –


• The Graphical representation of all the combinations of 2 inputs , producing same level of output is called an isoquant curve.
• An isoquant curve is always technically efficient.


1 comment:

sonia kapoor said...

Gr8 Post!! It clearly explains the meaning of an isoquant curve, few days back I was looking for the types of iso-quant curves and found a very good piece of information over here Types of Iso-Quant Curves . May be it will help in the further understanding of these curves.