ECON 101 Lecture Notes - Isocost, Isoquant, Horse Length
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ECON 101 Full Course Notes
Verified Note
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Document Summary
Combination of inputs that will produce the firm"s desired level of output @ the lowest possible cost *economically most efficient method of production) Identification of the best factor combination in the economically most efficient method of production, involves combining the two concept isoquants and isocosts. Is a curve representing various combinations of inputs capable of producing a constant level of output. Throughout the range of i1 is a constant level of output. Each point on the isoquant i1 represents a combination of l + k capable of producing the constant level of output. Production function: s = , s = 6, s= 8, s=10. 100: as we move away from the origin, each higher isoquant represents a higher level of output. Represents various combinations of input that a firm can acquire with its entire cost outlay. For each cost outlay, there is a corresponding isocost line.
