Basically indifference curves for producers, with caveats.
An Isoquant describes the different combinations of inputsthat will result in a constant level of output.
would describe an Isoquant at the level Y* of output, forexample.
Isoquants are strictly convex and they do not cross.
Isoquants are a CARDINAL measure
, whilstIndifference curves are ORDINAL.
The slope of an Isoquant shows the
Marginal Rate of Technical Substitution
i.e., the rate at which you wouldhave to substitute two inputs to retain the same level of output.
You can derive the MRTS thusly:
Y = F(K,L)
dY = MPK. dK + MPL. dL = 0
L = MPL
MPK = MRTS of L for K
Production functions are HOMOTHETIC:
Any trade off implied by the MRTS is due to
the Ratio of twoinputs, NOT the scale of output.
This suggests that all Isoquants are radial expansions of one another.