Worked Examples · Example 3
Q.
The following combinations of labour and capital all produce exactly 100 units of output (an isoquant). Compute the Marginal Rate of Technical Substitution () between each successive pair of combinations, and comment on the trend.
| Combination | Labour () | Capital () |
|---|---|---|
| A | 1 | 12 |
| B | 2 | 8 |
| C | 3 | 5 |
| D | 4 | 3 |
| E | 5 | 2 |
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Start your 14-day free trial to unlock the full solution →is computed between each consecutive pair of combinations, all lying on the SAME isoquant (output fixed at 100 units):
A to B: , .
B to C: , .
C to D: , .
D to E: , . …
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