what is an isoquant curve 
an isoquant curve is a concave shaped line on a graph used in the study of microeconomics that charts all the factors or inputs that produce a specified level of output this graph is used as a metric for the influence that the inputs most commonly capital and labor have on the obtainable level of output or production the isoquant curve assists companies and businesses in making adjustments to inputs to maximize production and thus profits understanding an isoquant curvethe term isoquant broken down in latin means equal quantity with iso meaning equal and quant meaning quantity essentially the curve represents a consistent amount of output the isoquant is known alternatively as an equal product curve or a production indifference curve it may also be called an iso product curve most typically an isoquant shows combinations of capital and labor and the technological tradeoff between the two how much capital would be required to replace a unit of labor at a certain production point to generate the same output labor is often placed along the x axis of the isoquant graph and capital along the y axis due to the law of diminishing returns the economic theory that predicts that after some optimal level of production capacity is reached adding other factors will actually result in smaller increases in output an isoquant curve usually has a concave shape the exact slope of the isoquant curve on the graph shows the rate at which a given input either labor or capital can be substituted for the other while keeping the same output level for example in the graph below factor k represents capital and factor l stands for labor the curve shows that when a firm moves down from point a to point b and it uses one additional unit of labor the firm can give up four units of capital k and yet remain on the same isoquant at point b if the firm hires another unit of labor and moves from point b to c the firm can reduce its use of capital k by three units but remain on the same isoquant image by julie bang investopedia 2019