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Isoquants, Equal Product Curves

 Isoquants, Equal Product Curves

Isoquants

    Isoquants are termed as equal product curves and are similar to the indifference curve of the thesis of consumer’s behaviour. An Isoquant depicts all those input combinations which are competent of manufacturing the same level of productivity.

    The Isoquants are therefore, contour lines which trace the locus of equal productivities. As an Isoquant depicts are combinations of inputs which are capable of manufacturing an equal productivity, the manufacturer would be indifferent among them. Thus another name that is frequently provided to the parity commodity curves is production indifference curve.

    The concept of Isoquant can be meagrely known from the below presentation. It is assumed that two aspects labour and capital are being employed to produce a commodity. Each of the aspect combinations P, Q, R, S and T manufactures the same level of productivity. Each of the aspect with factor combination P comprising of 10 units of labour and 100 units of capital manufactures the offered 1000 units of productivity.

    Likewise, combination Q comprising of 20 units of labour and 80 units of capital, R combination comprising of 30 units of labour and 60 units of capital, combination S comprising of 40 units of labour and 40 units of capital whilst combination T comprises of 50 units of labour and 20 units of capital are competent of producing the same volume of productivity.

    The diagrams represents the plotted points of the given combinations and by combining them we procure an Isoquant depicting that each combination depicted on it can manufacture 1000 units of productivity.

Factor Combination

Labour

Capital

P

10

100

Q

20

80

R

30

60

S

40

40

T

50

20

    Even though the Isoquants are looking similar to the indifference curve of the thesis of consumer’s behaviour and it structure, there is one significant dissimilarity among the two. An indifference curve depicts all those combinations of two commodities which provide the same contentment or utility to a consumer but no attempt is made to state the degree of utility it stands for in precise quantitative modes.

    This is for the reason that the cardinal measurement of satisfaction or utility in unmistakable terms is not feasible. This is the reason why normally label indifference curves by ordinal numbers as I, II, III etc depicting that a higher indifference curve depicting a greater level of contentment than a lower one, but the information as to by how much one level of contentment is huger then another is not specified.

    Alternatively, we can label Isoquants in the physical units of productivity without any complexity. Manufacturing of a decent being a physical occurrence tends itself meagrely to complete measurement in physical units. Since every Isoquant depicts definite level of manufacturing, it is feasible to say by how much one Isoquant depicts huger or lesser manufacture than another.

     In the second diagram we have drawn an Isoquant map or equal product map with a set of four Isoquants which represent 1000, 1200, 1400 and 1600 units of productivity correspondingly. Then, from this group of Isoquants it is very simple to decide by how much manufacture level on one Isoquant curve is huger or lesser than an another.

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