isoquant


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isoquant

a curve showing the various combinations of two inputs which can be used to produce a specific level of output.
References in periodicals archive ?
A virtual isocost line FG is shown, parallel to line AB', to highlight the influence of the actual income change and to make the original isoquant [Q.
The production function can be defined in terms of the efficient subset as an isoquant (Y) = {X: X [memebr of] L(Y)}.
C, of course, is an optimal solution, as the isocost curve is tangential to a corresponding isoquant.
Rothbard derives isoquants and isocosts, and shows that the slope of the isosquant is the marginal rate of technical substitution, and the slope of the isocost is the ratio of the fixed prices, and that the cost minimizing combination of factor inputs for a given level of output is where the slopes of the isoquant and isocost are equal (Rothbard, 2015 [1953], p.
The inner boundary of this set is a piece-wise linear isoquant which is determined by the observed data point (i.
DEA presumes that linear substitution is possible between observed input combinations on an isoquant (which is generated from the observations in piecewise linear forms).
Because function of production is a physical relationship between producing factor and the production, there is the frontier lying on isoquant line.
Figure 1, with isoquant and isocost, implies that empirical economists must accurately specify a win production or win cost function to estimate the efficiency of sports teams rather than specify an arbitrary win regression equation.
Figure 1 shows an isoquant qq producing a single output with factor inputs x1 and x2 and isocost ww which traces the ratio of factor prices.
All of the combinations of time and money result in the same performance makeup of what is called a performance isoquant.
Thus, the curve drawn by the theorem can correspond to an isoquant curve in the production theory in economics.