(Equal Product Curve or ISO Product Curve or Production Indifference Curve):
Definition and Meaning:
The word ‘iso’ is of Greek origin and means equal or same and the word ‘quant’ means quantity. An isoquant may be defined as:
“A curve showing all the various combinations of two factors that can produce a given level of output. The isoquant shows the whole range of alternative ways of producing the same level of output”.
The modern economists are using isoquant, or “ISO” product curves for determining the optimum factor combination to produce certain units of a commodity at the least cost.
Schedule and Example:
The concept of isoquant or equal product curve can be better explained with the help of a schedule (table) and example, given below:
In the table given above, it is shown that a producer employs two factors of production X and Y for producing an output of 100 meters of cloth. There are five combinations which produce the same level of output (100 meters of cloth).
The factor combination A using 1 unit of factor X and 14 units of factor Y produces 100 meters of cloth. The combination B using 2 units of factor X and 10 units of factor Y produces 100 meters of cloth. Similarly combinations C, U and E, employing 3 units of X and 7 units of Y, 4 units of X and 5 units of Y, 5 units of X and 4 units of Y produce 100 units of output, each. The producer, here, is indifferent as to which combination of inputs he uses for producing the same amount of output.
Diagram (ISO Product Curve):
The alternative techniques for producing a given level of output can be plotted on a diagram (ISO product curve).
The diagram 12.1 shows the 100 units isoquant plotted to ISO product schedule. The five factor combinations of X and Y are plotted and are shown by points a, b, c, d and e. If we join these points, it forms an ‘isoquant’.
An isoquant therefore, is the graphic representation of an iso-product schedule. It may here be noted that all the factor combinations of X and Y on an iso-product curve are technically efficient combinations. The producer is indifferent as to which combination he uses for producing the same level of output.
It is in this way that an iso product curve is also called ‘production indifference curve’. In the figure 12.1, ISO product IP curve represents the various combinations of the two inputs which produce the same level of output (100 meters of cloth).
An isoquant map shows a set of iso-product curves. Each isoquant represents a different level of output. A higher isoquant shows a higher level of output and a lower isoquant represents a lower level of output.
In the above diagram 12.2, a family of three iso-product curves which produce various level of output is shown. The iso product IQ1 yields 100 units of output by using quantities of inputs X and Y. So is also the case with isoquant IQ2 yielding 300 units of output.
We conclude that an isoquant map includes a series, of iso-product curves. Each isoquant represents a different level of output. The higher the isoquant output, the further right will be the isoquant.