The term “isoquant” has been derived from the Greek word “iso” meaning equal and Latin word “quantus” meaning “quantity”.
The “isoquant curve” is ,therefore, also known as “Equal product curve” or “Production Intelligence Curve”.
An isoquant curve is locus of point representing various combinations of two inputs – capital and labor – yielding the same output .
Isoquant curves are drawn on the basis of the following assumptions :-
(i) There are only two inputs , v12 , labor ( L ) and capital (K) tom produce a commodity X .
(ii) The two inputs – L and K – can substitute each other but at diminishing rate .
(iii) The technology of production is given .
Given these assumptions , it is always possible to produce given quantity of commodity X with various combination of labor and capital . The factor combinations are so formed that the substitution of one factor for the other leaves the output unaffected .The technology is presented through are isoquant curve ( IQ1 = 100 ) . The curve IQ1 all along its length represents a fixed quantity , 100 units of product X . This quantity of output can be produced with a number of labor-capital combination .
Points A , B , C and D on the isoquant curve IQ1 shows four different combinations of inputs , K and L , all yielding the same output – 100 units . The movement from A to B indicates decreasing Quantity Of K and increasing number of L .This implies substi- -tution Of labor for capital such that all the input combinations yield the same quantity of commodity X i.e.. IQ1 = 100 .