Isoquant
Topic: Production Function, Returns and Costs · NCERT: Class 12, Ch 3 "Production and Costs"
Meaning
An isoquant ("equal quantity") is a curve showing all combinations of two inputs that give the same maximum output. When the marginal products of both inputs are positive, it slopes downward: if you use more of one input, you need less of the other to keep output the same. Isoquants are usually convex (bowed towards the origin), because MRTS diminishes. The MRTS (marginal rate of technical substitution, MP_L / MP_K) is the amount of capital one extra unit of labour can replace. Isoquants never cross, and a higher isoquant means more output.
Example
In NCERT's Table 3.1, 10 units of output come from (4L, 1K), (2L, 2K) or (1L, 4K). These three points lie on one isoquant. For perfect substitutes, such as Q = 5L + 2K, the isoquant is a straight line. For fixed proportions, such as one driver per bus, it is L-shaped.
Don't confuse with
- Indifference curve: it shows equal satisfaction, which cannot be measured. An isoquant carries a measurable output label.