EE&FA - ISOQUANT - FINAL YEAR CS/IT - SRI SAIRAM INSTITUTE

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EE&FA - ISOQUANT - FINAL YEAR CS/IT - SRI SAIRAM INSTITUTE OF TECHNOLOGY - DR.K.BARANIDHARAN

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Wingdings:

Dr.K.Baranidharan Present by…

Times New Roman:

Engineering Economics & Financial Accounting ment E e & f a 2 18 August 2013

Book Antiqua:

ISOQUANT

Monotype Sorts:

ISOQUANT- ISOCOST ANALYSIS Isoquant A line indicating the level of inputs required to produce a given level of output Iso- meaning - ‘Equal’ -’Quant’ as in quantity Isoquant – a line of equal quantity

Calibri:

ISOQUANTS An isoquant curve shows various combinations of two input factors such as capital and labour , which yield the same level of output. An isoquant curve represent all such combinations which yield equal quantity of the output and any or every combination is a good combination of the manufacture. Since he prefers all these combination equally, an isoquant curve is also called “product indifference curve”

Algerian:

Units of K 40 20 10 6 4 Units of L 5 12 20 30 50 Point on diagram a b c d e a Units of labour ( L ) Units of capital ( K ) An isoquant yielding output (TPP) of 5000 units

Pwrpnt7:

Units of K 40 20 10 6 4 Units of L 5 12 20 30 50 Point on diagram a b c d e a b Units of labour ( L ) Units of capital ( K ) An isoquant yielding output (TPP) of 5000 units

!Colander02:

Units of K 40 20 10 6 4 Units of L 5 12 20 30 50 Point on diagram a b c d e a b c d e Units of labour ( L ) Units of capital ( K ) An isoquant yielding output (TPP) of 5000 units

Office Theme:

Features of ISOQUANTS DOWNWARD SLOPING: An isoquant must slope downwoards from left to right Which implies that using more of one input to produce the same level of output must imply using less of the other inputs

Image Document:

CONVEX TO ORIGIN: Isoquants are convex to the orgine . It is because the input factors are not perfect substitutes. One input factor can be substituted by another input factor in a “ diminishing marginal rate ” If the input factors were perfect substitutes, the isoquant would be a falling straight line .

Microsoft Graph 2000 Chart:

Isoquant where input factors are perfect substitutes Units of labour ( L ) Units of capital ( K ) Assumptions TC = 200 000 TC = 300 000 TC = 400 000 TC = 500 000

Chart:

When the input are used in a fixed proportion and substitution of one input for other cannot take place, the isoquant will be L shaped.

Dr.K.Baranidharan:

Isoquants where input are used in a fined proportion Complementary inputs MRTS=0

Engineering Economics & Financial Accountingment:

DO NOT INTERSECT: Two isoquants do not intersect. It is because each of these denote a particular level of output. If a manufacturer wants to operate at a higher level of output, he has to switch over to another isoquants with a higher level of output.

ISOQUANT:

Q 1 Q 2 Q 3 Q 4 Q 5 Units of capital ( K ) Units of labour (L) An isoquant map

ISOQUANT- ISOCOST ANALYSIS:

DOES NOT TOUCH AXES: The Isoquants touches neither x nor Y axis as both input are required to produce a given product

ISOQUANTS:

Dr.K.Baranidharan THANK YOU

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