Isoquant - Meaning and Properties * Marginal Rate of Technical Substitution * Law of Returns to Scale Meaning An isoquant is a firm’s counterpart of the consumer’s indifference curve. An isoquant is a curve that show all the combinations of inputs that yield the same level of output. ‘Iso’ means equal and ‘quant’ means quantity. Therefore‚ an isoquant represents a constant quantity of output. The isoquant curve is also known as an “Equal Product Curve” or “Production Indifference Curve”
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9.d. Isoquants: An isoquant (equal quantity) is a curve that shows the combinations of certain inputs such as Labor (L) and Capital (K) that will produce a certain output Q. Mathematically‚ the data that an isoquant projects is expressed by the equation f (K‚L) = Q This equation basically says that the output that this firm produces is a function of Labor and Capital‚ where each isoquant represents a fixed output produced with different combinations of inputs. A new isoquant emerges for every
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PRODUCTION FUNCTION Objectives After going through this unit‚ you should be able to: familiarise with the concepts and rules relevant for production decision analysis; understand the economics of production; understand the set of conditions required for efficient production. Introduction to Microbes Structure 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 7.9 Introduction Production Function Production Function with one Variable Input Production Function with two Variable Inputs The Optimal Combination
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parle-g INTRODUCTION A long time ago‚ when the British ruled India‚ a small factory was set up by Mohanlal Dayal Chauhan in the suburbs of Mumbai city‚ to manufacture sweets and toffees. The year was 1929 and the market was dominated by famous international brands that were imported freely. Despite the odds and unequal competition‚ this company called Parle Products‚ survived and succeeded‚ by adhering to high quality and improvising from time to time. A decade later‚ in 1939‚ Parle Products began
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What is Production Function? Definition and Explanation: ‚ Production of goods requires resources or inputs. These inputs are called factors of production named as land‚ labor‚ capital and organization. A rational producer is always interested that he should get the maximum output from the set of resources or inputs available to him. He would like to combine these inputs in a technical efficient manner so that he obtains maximum desired output of goods. The relationship between the inputs and
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THE PRODUCTION PROCESS :THE BEHAVIOR OF PROFIT-MAXIMIZING FIRMS THE BEHAVIOR OF PROFIT-MAXIMIZING FIRMS Production : The process by which inputs are combined‚transformed‚and turned into outputs. Firm : An organization that comes into being when a person or group of people decides to produce a good or services to made a perceived demand Three decisions that all firms must make: 1. How much output to supply 2. How to produce that output 3. How much of each input to demand a) PROFITS AND ECONOMIC
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Ralph T. Byrns Modern Microeconomics 2001 © Chapter 8 The Costs of Production Production and Costs Costs in the Short Run Fixed Costs Implicit Costs Explicit Costs Variable Costs Average Costs Marginal Costs The Symmetry Between Production and Costs Total Product and Total Cost Curves Geometry of Average and Marginal Costs Curves Average Physical Product and Average Variable Costs Marginal Physical Product and Marginal Cost Costs in the Long Run Isocost Lines Cost Minimization The
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Production is defined as “the step-by-step conversion of one form of material into another form through chemical or mechanical process to create or enhance the utility of the product to the user.” Thus production is a value addition process. At each stage of processing‚ there will be value addition. Edwood Buffa defines production as ‘ a process by which goods and services are created ’ . Some examples of production are: manufacturing custom-made products like‚ boilers with a specific
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Contents Pages 1. Abstract 2. Description of the business 3. Justification of location 4. Selection of appropriate labour 5. Sources of Fixed and Working Capital 6. Role of the entrepreneur 7. Types and levels of Production 8. Quality control Measures 9. Use of technology 10. Linkages 11. Potential for growth & Government regulations 12. Ethical issues 13. Description of the Business: The full service sea food restaurant and fast
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PRODUCTION THEORY AND THEORY OF COSTS Production and Production Theory Production refers to the transformation of inputs into outputs (or products) An input is a resource that a firm uses in its production process for the purpose of creating a good or service. Most resources are lumped into three categories: - Land - Labor - Capital The two kinds of inputs: Fixed vs. Variable Inputs Fixed inputs -resources used at a constant amount in the production of a commodity. Variable inputs
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