Meaning of Equal Product Curves
In recent years, a t unique has been developed to study the theory of production and to show the e it” • of a producer regarding combination of factors. This technique is of iso-product curves which is a parallel concepts to the indifference curves in the theory of consumption
Just as an indifference c e represent various combinations of two goods which give a consumer equal am nOt of Ii. faction, similarly an iso-product curve also shows all possible combination of the t 0 inputs physically capable of producing a given level of output. Since an iso-p ct curve represents tho e combinations which will allow the production of an equal quantity of output. the producer would be indifferent between them. ISO-product curves are. therefore. called Product-indifference Curve
They are also known as Squanto or Equal-product Curves. Any point on the Squanto is a recipe for the same output as an) other point on the same curve. The concept of equal-product curves can be easily understood from the table given below. In this table. we have assumed that two factors X and Y are being used to produce a given product.
To begin with. combination A. representing I unit of factor X and 12 units of factor Y. produces a given quantity (say. 40 units) of a product. 1\11 other combinations in the table are assumed to yield the same amount. i.e.. 40 unit of the product. Thus. combination C representing 3X + 5Y, combination D representing 4X + 3Y and combination E having 5X + 2Y will all produce 40 units of the product. If we now plot all these combinations on a graph paper and join them, we shall get a continuous and smooth curve called iso-product curve on which are represented the various combinations A, 8, C, 0 and E of the above table. IP represents all those combinations with which 40 units of the product can be produced. The shape of the quadrants shows the degree of ‘sustainability between the two factor used in production.
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