Which of the assumption is NOT TRUE in relation to isoquant curve? •
Right Answer is: B
• The literal meaning of the word Isoquant is equal quantity (‘Iso’- equal & ‘Quant’-quantity).
• Hence, an Isoquant curve is the curve which shows all the combinations of inputs which yield the equal level of output.
• There are four factors of production i.e. capital, labour, land and entrepreneurship.
• An Isoquant Curve derived from combinations of any two of the four factors of production can helps a business to choose the best cost-effective combination of factors of production, as the output in each case will remain same.