This point can be found where the slopes of the theisoquant curve and isoquant line are equal. And this is equal at the point of tangency.
• The tangency point of Isoquant Map and isocost line gives us the equilibrium position E.
• Isoquant map intersects the isocost line at 3 points x , E and Z
. x and z lie on the lower isoquant curve than E lies on and hence gives lesser utility than E. So, E is the economically Efficient Point of Production
1 comment:
why talk about utility in context of isoquants???they only talk about output level without giving utility 2 anybody.
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