The slope at any point on it is known as the marginal rate of technical substitution and their point of tangency with a cost constraint can determine optimal output. Their convex shape is due to the law of diminishing marginal productivity and lines farther from the origin r
The slope at any point on it is known as the marginal rate of technical substitution and their point of tangency with a cost constraint can determine optimal output. Their convex shape is due to the law of diminishing marginal productivity and lines farther from the origin represent higher levels of output. Because greater use of inputs leads to greater output, for given output levels, their slope is negative. Also known as production indifference curves, FTP, identify these lines that show combinations of capital and labor that lead to the production of the same levels of output.
The slope at any point on it is known as the marginal rate of technical substitution and their point of tangency with a cost constraint can determine optimal output.
{Isoquant}