Q.Explain the concept of isoquant curve with the help of diagram. OR Total cost curve is the vertical sum of total fix cost and total variable cost. Explain with the help of diagram.
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Start your 14-day free trial to unlock the full solution →An isoquant shows all input combinations giving the same output (downward sloping, convex to the origin). OR: the total cost curve is the vertical sum of the TFC and TVC curves (TC = TFC + TVC).
Main question — isoquant curve:
An isoquant (also called an iso-product or equal-product curve) is a curve showing all the different combinations of two inputs (say labour and capital) that produce the same level of output. For example, a given output can be produced using more labour and less capital, or less labour and more capital — all such combinations lie on one isoquant.
Features (diagram: labour on the X-axis, capital on the Y-axis):
- It slopes downward from left to right, because to keep output constant, using more of one input means using less of the other.
- It is convex to the origin, due to the diminishing marginal rate of technical substitution (as more labour is used, less and less capital can be given up per extra unit of labour).
- A higher isoquant (farther from the origin) represents a higher level of output.
- Two isoquants never intersect.
OR alternative — total cost curve as the vertical sum of TFC and TVC:
At any level of output, total cost is the sum of total fixed cost and total variable cost: TC = TFC + TVC. Therefore the total cost curve is obtained by adding the TFC and TVC curves vertically at each output level.
| Output (units) | TFC (₹) | TVC (₹) | TC = TFC + TVC (₹) |
|---|---|---|---|
| 0 | 60 | 0 | 60 |
| 1 | 60 | 30 | 90 |
| 2 | 60 | 50 | 110 |
| 3 | 60 | 80 | 140 |
| … |
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