What is the difference between indifference curve and isoquant

Secondly, on an indifference map one can only say that a higher indifference curve gives more satisfaction than a lower one, but it cannot be said how much more or less satisfaction is being derived from one indifference curve as compared to the other, whereas one can easily tell by how much output is greater on a higher isoquant in comparison with a lower isoquant.

Lastly, since satisfaction on indifference curves cannot be measured in physical units, they are given arbitrary numbers 1, 2, 3, 4, etc. The isoquants have an added advantage over the former because they can be labelled in physical units, as , , , etc. Article Shared by. Read more about us.

Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Spread the love. Looking for project help, assignment help, writing help, research help? Perfect competition is a type of theoretical market structure that focuses on the relationship between the producer and the consumer. In this model, it is assumed that the goods offered for sale are all equal in quality and that the market itself sets the price.

Since there is a large number of buyers and sellers, neither party has total influence or control over the market price. Welfare economics is the specific study of how the allocation of resources and goods affects the economic well-being.

In many cases, these extra resources are the sources of labor and the costs incurred are the salaries paid to the employees. Organizations ensure that their marginal resource cost is equal to or less than the amount it takes to produce one more unit of the product. Marginal revenue product is the additional revenue generated from using one more unit of the input. Let c be the procurement cost, p the price, and g a salvage value.

In the objective 5 maximizes the profit, consisting of the sample average revenue from sold and salvaged products minus the purchasing cost. The subsequent constraints ensure that for each scenario sales cannot be larger than the Demand 6 and the inventory 7. A positive value of Std. This cost changes depending on how many products the company aims to produce. Changes in production may increase or decrease the marginal cost due to the marginal cost including all costs such as materials, labour, infrastructure.

Marginal cost diagram has a U-shaped curve as a result of increasing and then decreasing marginal returns. It is caused by the law of diminishing marginal returns. Essays Essays FlashCards. Browse Essays.