ISOQ U A NT S A N D

E R TIE S O F I SO Q U AN TS
PROP SRIVATSAN S
19BFS053
 ISOQUANTS

• THE TERM ISO-QUANT OR ISO-PRODUCT IS COMPOSED OF TWO WORDS, ISO =

EQUAL, QUANT = QUANTITY OR PRODUCT = OUTPUT.

• ISOQUANTS ARE THE CURVES WHICH REPRESENT THE DIFFERENT

COMBINATIONS OF INPUTS PRODUCING A PARTICULAR QUANTITY OF OUTPUT.
ANY COMBINATIONS ON THE ISOQUANT REPRESENTS THE SAME LEVEL OF
OUTPUT.
 DEFINITION

• “ISO-PRODUCT CURVE SHOWS THE DIFFERENT INPUT COMBINATIONS THAT WILL

PRODUCE A GIVEN OUTPUT.” SAMUELSON

• “AN ISO-QUANT IS A CURVE SHOWING ALL POSSIBLE COMBINATIONS OF INPUTS

PHYSICALLY CAPABLE OF PRODUCING A GIVEN LEVEL OF OUTPUT.” FERGUSON
 ASSUMPTIONS
• TWO FACTORS OF PRODUCTION
• DIVISIBLE FACTOR
• CONSTANT TECHNIQUE
• POSSIBILITY OF TECHNICAL SUBSTITUTION- PRODUCTION FUNCTION IS OF
‘VARIABLE PROPORTION’ TYPE RATHER THAN FIXED PROPORTION.

• EFFICIENT COMBINATIONS - UNDER THE GIVEN TECHNIQUE, FACTORS OF

PRODUCTION CAN BE USED WITH MAXIMUM EFFICIENCY.
ISO PRODUCT SCHEDULE
ISOQUANT CURVE
ISOQUANT MAP
 PROPERTIES

• ISO-PRODUCT CURVES SLOPE DOWNWARD FROM LEFT

TO RIGHT

WHEN WE INCREASE LABOUR, WE HAVE TO DECREASE

CAPITAL TO PRODUCE A GIVEN LEVEL OF OUTPUT.
• ISOQUANTS ARE CONVEX TO THE ORIGIN Combination Units of
capital
Units of
labour
MRTS

 DUE TO MRTS (MARGINAL RATE OF A 1 12 -

TECHNICAL SUBSTITUTION)
B 2 8 4
MRTS = ∆L/∆C C 3 5 3
MRTS OF B = 12-8/2-1
D 4 3 2
= 4/1 =4 
E 5 2 1
MRTS (MARGINAL RATE OF TECHNICAL
SUBSTITUTION)

BASED ON THE PRODUCTION FUNCTION WHERE

TWO FACTORS CAN BE SUBSTITUTED IN
VARIABLE PROPORTIONS IN SUCH A WAY AS TO
PRODUCE A CONSTANT LEVEL OF OUTPUT.
• TWO ISO-PRODUCT CURVES NEVER CUT EACH
OTHER

IF TWO ISOQUANT CURVES INTERSECT EACH OTHER

– A SINGLE COMBINATION OF TWO FACTORS
PRODUCES TWO LEVELS OF OUTPUT.
• HIGHER ISO-PRODUCT CURVES REPRESENT
HIGHER LEVEL OF OUTPUT

 IQ1 REPRESENTS AN OUTPUT LEVEL OF 100

UNITS WHEREAS IQ2 REPRESENTS 200 UNITS
OF OUTPUT.
• ISOQUANTS NEED NOT BE PARALLEL TO
EACH OTHER

 THE RATE OF SUBSTITUTION IN

DIFFERENT ISOQUANT SCHEDULES NEED
NOT BE NECESSARILY EQUAL.
• NO ISOQUANT CAN TOUCH EITHER AXIS
IF AN ISOQUANT TOUCHES X-AXIS, THEN THE
PRODUCT IS BEING PRODUCED WITH THE HELP
OF LABOUR ALONE WITHOUT USING CAPITAL AT
ALL.
•  EACH ISOQUANT IS OVAL-SHAPED
THE FIRM WILL PRODUCE ONLY IN THOSE
SEGMENTS OF THE ISOQUANTS WHICH ARE
CONVEX TO THE ORIGIN AND LIE BETWEEN THE
RIDGE LINES – ECONOMIC REGIONS OF
PRODUCTION

 UP DOTTED PORTION, MORE CAPITAL AND IN

THE LOWER DOTTED PORTION MORE LABOUR-
UNECONOMIC REGIONS OF PRODUCTION