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Micro Economics

Notes 7.3.1 Types of Isoquants

The production isoquant may assume various shapes depending on the degree of substitutability
of factors. The types are discussed in Table 7.2 and the matching graphs are shown in
Figure 7.2.

Table 7.2: Types of Isoquants
Types of Isoquants Description
Linear Isoquants This type assumes perfect substitutability of factors of production. A given
commodity may be produced by using only capital, or only labour, or by an

infinite combination of K and L.
Input-output This assumes strict complementarity, that is, zero substitutability of the
Isoquants factors of production. There is only one method of production for any one
commodity.
The isoquant takes the shape of a right angle. This type of isoquant is called
“Leontief isoquant.”
Kinked Isoquants This assumes limited substitutability of K and L. There are only a few processes
for producing any one commodity. Substitutability of factors is possible only at
the kinks. It is also called “activity analysis isoquant” or “linear-programming
isoquant” because it is basically used in linear programming.
Smooth, Convex This form assumes continuous substitutability of K and L only over a certain
Isoquants range, beyond which factors cannot substitute each other. This isoquant
appears as a smooth curve convex to the origin.

7.3.2 Characteristics of Isoquants

Figure 7.2: Types of Isoquants

Isoquants show the following characteristics:
1. An isoquant curve slopes downwards to the right. In other words, it has a negative slope.

The implication of such a slope is that if a firm wants to employ more of the factor input,
it shall have to employ less of another factor input in order to achieve the same level of
output.

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