What do mean by convex isoquant, Managerial Economics

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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.


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