Update: ET Unit6

content/uninotes/et-dcm1107-unit6/self.md

@@ -51,3 +51,62 @@ Marginal production refers to the additional units produced with the usage of th
 
 MP = n – 1  
 Where, MP = Marginal Production, n = total output increased due to the addition of one unit of the variable factor (n - 1 = total no. of factors before the increase of a marginal unit).
+
+
+## Isoquants
+
+An isoquant is a locus of points that represent the different technically efficient ways of combining the factors of production for producing a fixed level of output. Isoquant term is taken from a Greek word ‘iso’, which implies ‘equal’, and ‘quants’, which means ‘quantity’. The isoquant curve is known as the ‘equal product curve’ or production indifference curve. An isoquant curve presents the locus of points that indicate various combinations of two inputs – capital and labour, producing a specific quantity of output or another combination which produces the same output.
+
+## Types of Isoquant Curves
+
+### A) Linear Isoquant Curve
+
+This curve is a straight line curve. It implies that by employing either capital or labour through various combinations, any quantity can be produced.
+
+### B) Right Angle Isoquant Curve
+
+According to this type of isoquant curve, there is substitution between the factors of production, and they have a major complementary nature between them. This means that there is only a single way of manufacturing any one commodity. This form of the curve is also referred to as the ‘Leontief Iso-quant’ or ‘input-output isoquant’ right-angled curve.
+
+
+### C) Kinked Isoquant Curve
+
+In this form of the curve, there is a limited substitutability between the different factors of production, and this substitution of factors can be observed at the kinks because there are not many processes involved in producing any one commodity. A kinked isoquant curve is also called ‘activity analysis programming isoquant or linear programming isoquant’.
+
+### D) Convex Isoquant Curve
+
+In this form of isoquant curve, the factors of production can be substituted with each other only to a certain level. This type of isoquant curve is in a convex shape and is smooth at the origin.
+
+## Characteristics of Isoquant Curves
+
+* Isoquant curves slope downwards.
+* Isoquant curves are convex to the origin.
+* Isoquant curves do not intersect each other.
+* A higher isoquant shows a higher level of output.
+
+## Marginal Rate of Technical Substitution
+
+The MRTS is a theory in economics that is used to show the rate at which one factor of input should decrease to maintain the same level of output when another factor is increased.  
+
+MRTS = MPL/MPK
+
+Where, MPL = Marginal Product of Labour, MPK = Marginal Product of Capital.
+
+## Revenue
+
+### A) Total Revenue:
+
+TR = AR × Q
+
+Where, TR is Total Revenue, AR = Average Revenue, Q = Output.
+
+### B) Average Revenue:
+
+AR = TR/Q
+
+Where, AR = Average Revenue, TR = Total Revenue, Q = Output.
+
+### C) Marginal Revenue:
+
+Marginal revenue is the net revenue obtained by selling an extra unit of the concerned commodity. It is the addition made to the total revenue by selling one more unit of the goods. Marginal revenue is computed by the division of the change in the rate of total revenue by the change in the rate of quantity.
+
+MR = ΔTR/ΔQ (Marginal Revenue = Change in Total Revenue/Change in Quantity)