isoquant for two inputs which are used in fixed proportion is which shape?
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In the standard isoquant (IQ) analysis, the proportion between the inputs (say, X and Y) is a continuous variable; inputs are substitutable, although they are not perfect substitutes, MRTSX,Ydiminishing as the firm uses more of X and less of Y.
Here we shall assume, however, that the inputs (X and Y) used by the firm can by no means be substituted for one another—they have to be used always in a fixed ratio. The production function of the firm in this case is called the fixed coefficient production function.
To illustrate the case, let us suppose that the two inputs (X and Y) are always to be used in the ratio 1 : 1 to produce the firm’s output. That is, any particular quantity of X can be used with the same quantity of Y. Let us suppose, 10 units of X when used with 10 units of Y would produce an output of 100 units.
Here we shall assume, however, that the inputs (X and Y) used by the firm can by no means be substituted for one another—they have to be used always in a fixed ratio. The production function of the firm in this case is called the fixed coefficient production function.
To illustrate the case, let us suppose that the two inputs (X and Y) are always to be used in the ratio 1 : 1 to produce the firm’s output. That is, any particular quantity of X can be used with the same quantity of Y. Let us suppose, 10 units of X when used with 10 units of Y would produce an output of 100 units.
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