What is isoquant equal to?

‘Iso’ means equal and ‘quant’ means quantity. Therefore, an isoquant represents a constant quantity of output. The isoquant curve is also known as an “Equal Product Curve” or “Production Indifference Curve” or Iso-Product Curve.”

What is an isocost in economics?

In economics an isocost line shows all combinations of inputs which cost the same total amount. Although similar to the budget constraint in consumer theory, the use of the isocost line pertains to cost-minimization in production, as opposed to utility-maximization.

Is isocost and isoquant same?

An isoquant shows all combinations of factors that produce a certain output. An isocost show all combinations of factors that cost the same amount.

What is isocost with example?

Isocost. An isocost shows all the combination of factors that cost the same to employ. In this example, a unit of labour and capital cost £6,666 each.

Is isoquant equal to product line?

Isoquants are called equal-product or iso-product curves. Again, as all the combinations yield the same level of output the producer tends to be indifferent among them. Hence, isoquants are also known as producer indifference curves. Further, isoquants share resemblances with the indifference curves.

What is an isoquant map?

A family of isoquants can be represented by an isoquant map, a graph combining a number of isoquants, each representing a different quantity of output.An isoquant map can indicate decreasing or increasing returns to scale based on increasing or decreasing distances between the isoquant pairs of fixed output increment.

Why is isocost line straight?

The isocost lines show the combinations of the two factors, generally labor and capital used in certain proportions in a business firm. When the input prices and the quantities used are fixed, the isocost line is considered straight.

What is isoquant map?

a collection of ranked ISOQUANT CURVES that exhibits, graphically, a producer’s increasing output per period when moving outwards from the origin using larger quantities of two FACTOR INPUTS, as in Fig. Isoquant curves are a cardinal measure, and the numbers on the isoquant curves in Fig. …

How do you make isocost?

The isocost line is a firm’s budget constraint when buying factors of production. To calculate the isocost line for a firm, begin with the total cost equation, TC = (W x L) + (r x K) and solve for K. W= wages, L =labor, r = the rent (what you pay for the use of capital), and K = capital.

What is kinked isoquant?

Kinked Isoquant: Refers to an isoquant that represents different combinations of labor and capital. These combinations can be used in different processes of production, but in fixed proportion. According to L-shaped isoquant, there would be only one combination between capital and labor in a fixed proportion.