Consider the isoquant map shown in Figure 89 Figure 89 Figur

Consider the isoquant map shown in Figure 8.9. Figure 89 Figure 8.9 Input 2 L\' 300 200 100 )I Input 1

Solution

MP of input 1 along the line OL\' is zero and MP of input 2 along the line OL is also zero. The area under these lines is known as economic or feasible production area. Any firm would not like to produce outside this area as the marginal productivity of at least one of the two inputs will be negative. If the input 1 and input 2 are substitutable then it may be efficient to produce at point B.