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Unit-10: Isoquant Curve

As much as production level increases, the Isoquant curve will be far from its original point. IQ , Notes
1
IQ and IQ represent the various levels of production. An Isoquant curve which is in right side
2
3
of the other curve indicates high level of production. So the IQ curve is from IQ and IQ curve
2
1
3
indicates more production than IQ curve. The high level of production will happen as much as
2
the Isoquant curve is high. But every Isoquant curves represent the various quantities of variable
factors.
10.6 Characteristics or Properties of Isoquant Curves

The characteristics of Isoquant curves match with indifference curve. These characteristics are –
1. Isoquant Curves Slope Downwards: An Isoquant curve, as shown in Fig. 10.3, is falling
downward from left to right. In other words, its slope is negative. The reason behind this is
substitution of factors. If we use a factor to get a fixed amount of production, then the second
factor will be less used. If both of the factors simutaneously will be used less or more, then
total production will not be the same. It will either be less or more. Table 1 indicates that to
produce 100 watches, more capital means 90 units are used and then it combines with lesser
amount of labour i.e. 10 units of labour. Thus to get 100 units of similar production, if we
use less capital i.e. 30 units then it will combine with more units of labour i.e. 40 units of
labour. The downward sloping of an Isoquant curve is substitution of factors. The factors
of production is substituted to each other so to get equal amount of production if using less
amount of a factor, then another factor is used in a greater way. This is the reason that the
slope of Isoquant curve is from above to below (downward).

Fig. 10.3

Y
IQ
1
Isoquant Curve
Slopes Downward
Capital

100
O
X
Labour

2. Isoquant Curves are Convex to the Origin: The Isoquant curve is always convex to its original
point O as shown in Fig. 10.4. It means the factor is not a perfect
Why the slope of Isoquant substitute. It means the marginal rate of technical substitution of
Curve is Convex? product has decreased. Table 1 indicates that to use 10 units of
labour 30 units of capital is withdrawn and to use extra 10 units of
The reason behind this is marginal labour, 20 units of capital is substituted. The level of production is
rate of technical substitution. equal on an Isoquant curve when the capital is withdrawing to use
every next unit of labour. In Fig. 10.4, the Isoquant curve’s point B
clarifies that to use 30 units of capital is withdrawn to use 10 extra units of labour. Thus the MRTS
of labour for capital is 3:1. It would be 2:1 on point C. So, marginal rate of technical substitution
has nature of fall. So IQ curve is convex to the origin.

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