Isoquants: An Isoquant is a locus of technically efficient combinations of two factors of production their utilization from which the same level of output is produced; its slope measures the marginal rate of technical substitution (MRTS) of one factor (eg labour) for another factor (eg. capital), that is MRTSLK or
capital for labour i.e. MRTSKL
Isoquants have the following properties:
- Negatively sloped – denoting marginal rate of technical substitution
- Do not intersect – if they do, it would mean that an Isoquant represents two levels of output, which is inconsistent with the definition of Isoquants.
- Convex to the origin – since the two factors of production are not perfect substitutes and therefore subject to diminishing marginal rate of technical substitution of one factor for another.
- Isoquants higher above and further away from the origin of an Isoquant map represent higher levels of output.