Iso Revenue Line Equation

In this equation pl is the price of labour and pk is the price of capital.

Iso revenue line equation. Graph the iso revenue line for revenue of 300. Products relate to. Iso cost line shows various combinations of labour and capital that the firm can buy for a given factor prices. Information about iso revenue line curve definition of iso revenue line curve.

26 the pint on y axis is determined by the value tr py 1 and that on the x axis is determined by the value tr py 2. The slope of iso cost line pl pk. Solution for the slope of an iso revenue line is determined by. Iso revenue line curve definition of iso revenue line curve synomyms iso revenue line curve definition of iso revenue line curve antonyms.

Find this point graphically hint you do not have to calculate a new iso revenue line but need to use the line from 6a. Iso revenue slideshare uses cookies to improve functionality and performance and to provide you with relevant advertising. Iso revenue line is a straight line as the output prices do not change with the quantity of the output sold. An iso revenue line for any total revenue can be easily draw by determining the extreme points on the axes of coordinates and connecting these points with a straight line.

Companies offering iso revenue line curve definition of iso revenue line curve. In case of a straight line production possibility curve the iso revenue line will not be tangent to it at all if the slope of the former is different from the slope of the latter. If you continue browsing the site you agree to the use of cookies on this website. And in case of a production possibility curve convex to the origin tangency condition shows the minimum total revenue rather the maximum total revenue as point g.

Connects the most profitable points for each of a number of ppcs. Shows all combinations of products sold that will yield the same revenue profit is maximized at the combination of products where isorevenue is tangent to the ppc the expansion path. Characteristics of iso revenue line 1. As the total revenue increases the iso revenue line shifts upwards and moves away from the origin.

Using the iso revenue line from 6a find the profit maximizing level of the two outputs for the producers given resources. The iso revenue lines are parallel to each other since price ratio remains constant and 4.