What do mean by convex isoquant, Managerial Economics

Assignment Help:

Q. What do mean by Convex Isoquant?

Isoquants are convex to the origin:At any point of an isoquant,the slope is negative. Its numerical value measures the marginal rate of technical substitution between capital and labour. It equals the ratio of marginal product of labour to marginal product of capital. So the slope of an isoquant is

1249_What do mean by Convex Isoquant.png

Where ΔK is the change in capital and ΔL is the change in labour, MRTSLK is the marginal rate of technical substitution of labour for capital, MPL is the marginal product of labour and MPK is the marginal product of capital. Convexity of isoquant means that as we move down the curve then less and less of capital is given up for an extra unit of labour so as to keep constant the level of output. This can be observed from the Figurebelow.

1505_What do mean by Convex Isoquant1.png

Figure: Convex Isoquant

It can be seen from the figure above that as we increase labour at a constant rate, amount of capital given up (ΔK) for an extra unit of labour goes on falling. So the convexity of isoquant demonstrates that marginal rate of technical substitution of labour for capital is diminishing.


Related Discussions:- What do mean by convex isoquant

Eating a certain amount, Jeremy is an economics learner who loves hamburger...

Jeremy is an economics learner who loves hamburgers. He could eat any number of them for dinner, but he gets a really bad stomach ache after eating a certain amount. In fact, his u

2 questions., Question 1: Martha National County Club is a golf club in an ...

Question 1: Martha National County Club is a golf club in an isolated wealthy community and accepts only females as members. There are 1,000 identical female members of the club an

Relationship TR, Explain in brief the relationship between TR,AR and MR und...

Explain in brief the relationship between TR,AR and MR under perfect market condition.

Insurance Premiums, Green Shield Insurance gives NEMO Corporation with cove...

Green Shield Insurance gives NEMO Corporation with coverage for prescriptions, dental work, and extended health services. Every subscriber uses $435 worth of dental services per ye

Asset market theory in environment and development, what is asset market th...

what is asset market theory theory in environmental economics?

Incremental profit, Electron Control, Inc., sells voltage regulators to oth...

Electron Control, Inc., sells voltage regulators to other manufacturers, who then customize and distribute the products to quality assurance labs for their sensitive test equipment

Demand function for money, Demand Function for Money In the Keynesian a...

Demand Function for Money In the Keynesian analysis , the demand for money is a function of the level of income and the rate of interest. According to Milton Friedman, the dema

Salvatore, manual problems solution of demand theory

manual problems solution of demand theory

Marijuana, Plot the demand schedule and draw the demand curve for the data ...

Plot the demand schedule and draw the demand curve for the data given for Marijuana in the case above.

Explain the theory of production, Explain the Theory of Production Co...

Explain the Theory of Production Cost and Production analysis is central for the unhampered functioning of the production process and for project planning. Production is an e

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd