Isoquants are normally drawn with a convex shape because:
A) inputs are perfectly substitutable.
B) inputs are perfectly complementary.
C) inputs are not perfectly substitutable.
D) inputs are not perfectly complementary.

Question

Quizplus · Accepted Answer

Isoquants represent all the combinations of two inputs that can produce the same level of output. If inputs were perfectly substitutable, the isoquants would be straight lines, but in the real world, inputs are not perfectly substitutable, so the isoquants are curved. This curvature reflects the fact that as we increase one input while holding the other input constant, the marginal product decreases, and therefore more and more of the second input is needed to compensate for the diminishing returns of the first input. This means that the rate at which we can substitute one input for another decreases as we move along an isoquant, resulting in a convex shape.

Isoquants Are Normally Drawn with a Convex Shape Because