ISO-QUANTS IN MICROECONOMICS

GOKUL RAMESH
I SEMESTER BA LLB
gokulramesh610@gmail.com
TABLE OF CONTENTS

Etymology & Definition

Understanding Isoquants

Types of Isoquants

Properties

References
ISO QUANT
• An iso-quant is a locus of all points at which
Latin the same quantity of output is produced
while changing the quantities of two or
more inputs.

Iso : Equal • There can be different combinations of

Quant : Quantity inputs. But the output of the curve remains
the same. Hence, the word iso-quant.

Meaning: Equal Quantity • The relationship between the combination

(Same output) of inputs and the resulting output can be
defined using the production function.
UNDERSTANDING ISOQUANTS.
• Production Function: Production function is defined as the
functional relationship between physical inputs and physical
PRODUCTIO outputs. Production function can be expressed as follows:
N
FUNCTION
Q = f (a, b, c, d…)
FIXED
INPUTS Where, Q stands for output, a, b, c, d…. are the productive
resources or inputs that help producing Q output; f refers to
VARIABLE function. Thus Q is the function of a, b, c, d etc. which means Q
INPUTS depends upon a, b, c, d and so on. Thus a production function
shows the maximum amount of output that can be produced
from a given set of inputs in the existing state of technology.
UNDERSTANDING ISOQUANTS.
•Fixed inputs are the production inputs that cannot be altered in the short-
run; even if the manager wants to use more or less of the input, there is not
PRODUCTIO enough time to change the quantity of the input during this production
N period.
FUNCTION
•Variable inputs are the production inputs that can be altered in the short-
FIXED run, for example, the business manager can easily use a greater quantity or
INPUTS a lesser quantity of the input during this production period.

Process: Manufacturing a car • A common misconception is to

VARIABLE • Fixed input Machinery, regard a possible life long asset like
INPUTS assembly parts. the land for the manufacturing plant
as a fixed input. All fixed inputs are
• Variable Labor, capital.
input considered to be variable in the long
run.
• Output A Car.
UNDERSTANDING
ISOQUANTS.
Output = f (Capital, Labor)
Or
Q = f (K, L)
,Where Q is constant and K, L are variable
inputs.

Combination Capital Labor

(K) (L)
A K1 L1

B K2 L2
 TYPES OF ISOQUANTS.

LINEAR ISOQUANT L- SHAPED ISOQUANT CONVEX ISOQUANT

LINEAR ISOQUANT.
• It is an unrealistic approach where one factor completely substitutes the other in the production process. Only two
combinations are taken into consideration i.e. (x, 0) & (0, y). The line which connects these two points is the linear
isoquant curve.

• When the isoquant curve intersects x-axis, capital is entirely replaced by the labor. When the curve crosses the y-
axis, the production is done through capital itself, without employing any labor.

• This is a case of Perfect substitution. Which means,

using only one of the two inputs, we will be able to
yield the same amount of output.

• Slope: Downward slope from left to right.

L- SHAPED
ISOQUANT.

–When the two factors of production cannot be

replaced by one another, a right-angled isoquant
curve is formed.
–This is a case of fixed proportion of input
variables. Meaning, only one combination of K &
L is possible.
–Here, the optimum level of production takes
place at the edge of the curve .Also, the output
remains the same throughout
CONVEX ISOQUANT.

• The number of combinations of the

production function is endless.

• This type of isoquant does not have

perfect substitution keeping in mind,
the impracticality of it.

• As one input keeps increasing, the other

input is bound to decrease.

• Negative curved slope from left to

right.
 PROPERTIES OF ISOQUANTS.

– Isoquants are Negatively Sloped.

– Higher Isoquants Represents Larger Output.
– No Two Isoquants Intersect or Touch each other.
– Isoquants are convex to the origin.
REFERENCES
• Iso-quants, MICROECONOMIC ANALYSIS (Varian & Hal R, 3rd ed., 1992).
• Meaning Of Production Function, INTRODUCTORY ECONOMICS, 41 (Shubhendhu Datta, 2006).
• Short run & Long Run, FRANK ISC ECONOMICS XII, 117 (D.K. Sethi & U. Andrews eds., 2018).
• Deepali Pal, Study Notes On Isoquants, ECONOMICS DISCUSSION FORUM,
https://www.economicsdiscussion.net/notes/study-notes-on-isoquants-with-diagram/16342
• Prachi M, Isoquant Curve, THE INVESTORS BOOK FORUM (Jan. 31, 2020),
https://theinvestorsbook.com/isoquant-curve.html#Properties
• Malawika Awasthi, Isoquants, SLIDE SHARE (Sep. 26, 2015),
https://www.slideshare.net/MALVIKAAWASTHI1/isoquants