Isoquants
An isoquants is a
curve on which the various combinations of labor and capital show the same
output. "An is product curve is a curve along which the maximum achievable
rate of production is constant." It is also known as a production
indifference curve or a constant production curve Just as an indifference curve
shows the various combinations of any two commodities that give the consumer
the same amount of satisfaction (iso-utility), similarly an isoquant indicates
the carious combinations of two factors of production which give the producer
the same level of output per unit of time. The Table below shows a hypothetical
isquant schedule of a firm producing 100 units of a good.
Isoquant Schedule
|
Combination
|
Capital Input
|
Labor Input
|
Total Output (In units)
|
|
First
|
9
|
5
|
100
|
|
Second
|
6
|
10
|
100
|
|
Third
|
6
|
15
|
100
|
|
Fourth
|
3
|
20
|
100
|
This table is illustrated on the
figure where labor units are measured along the X-axis and capital units on the
Y-axis. The first, second, third and the fourth combinations are shown as A.,
B., C and D respectively. Connect all these points and we have a curve IQ. This
is an isoquant. The firms can produces 100 units of output of point A on this
curve by having a combination of 9 units of capital and 5 units of labor.
Similarly point B shows a combination of 6 units of capital and 10 units of
labor; point C, 4 units of capital + 15 units of labor and point D, a
combination of 3 units of capital+ 20 units of labor to yield the same output
of 100 units. A number of isoquants representing different amounts of output
are known as an isoquant map. In the figure curves IQ, IQ1' IQ2 show an
isoquant map. Starting from curve IQ which yields 100 units of product, the
curve IQ1 shows 200 units and the Iq2 curve 300 units of the product which can
be produced with altogether different combinations of the two factors.
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