An isoquants is a curve on which the various combinations of labor and capital show the same output. “An is product curve is a curve along which the maximum achievable rate of production is constant.” It is also known as a production indifference curve or a constant production curve Just as an indifference curve shows […]

The Law of Diminishing Marginal Product

It has been discussed earlier that in the short run one of the factors of production is variable and the other(s) constant. The marginal product of the variable factor will decrease eventually as more and more of quantities of this factor will be combined with the other constant factor(s). The expansion of output with one […]