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Land utilisation

  LAND UTILIZATION  Land is a scarce resource, whose supply is fixed for all practical purposes. At the same time, the demand for land for various competing purposes is continuously increasing with the increase in human population and economic growth.Land use pattern at any given time is determined by several factors including size of human and livestock population, the demand pattern, the technology in use, the cultural traditions, the location and capability of land, institutional factors like ownership pattern and rights scale regulation. Major Types of Land Utilization in India : As in all other countries, land in India is put to various uses. The utilization of land depends upon physical factors like topography, soil and climate as well as upon human factors such as the density of population, duration of occupation of the area,land tenure and technical levels of the people.There are spatial and temporal difference in land utilization due to the continued interplay of phys...
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Producer's equilibrium - Isoquants analysis

PRODUCER'S equilibrium - Isoquants 
Meaning : Isoquants are also called as Iso-Product curves or production indifference curve presented by Modern economists. Isoquants are used in finding producer equilibrium .
An Isoquant shows different combinations of factors of production which when used in production process yield equal production and the producer will be indifferent as regards choice among those factor combinations.

Combination of    Units of     Units of    Output 
L and K                   Labour       Capital    Of cloth
      A.                            1.                  15.           100
      B.                            2.                  11.           100
      C.                            3.                    8.           100
      D.                            4.                   6.            100
      E.                             5.                   5.           100

In the table, it is assumed that there are two factors of production l and k are used for producing output of 100 metres of cloth which is possible by applying 5 different combinations of l and k . Combination A uses 1 unit of labour and 15 units of capital . Likewise, combinations B, C, D, E uses the given units of labour and capital .
But different combinations using different amounts of labour and capital produce same output of cloth.
Thus, an iso product schedule is a schedule of different combinations of factors of productions that yields same amount of output.
An isoquant is a graphic representation of iso product schedule .By plotting iso product schedule ,we get iso product curve called as isoquant represented as IQ. 

Isoquant map
The isoquant map shows a set of iso product curves. Higher the iso product curve shows higher level of output and lower iso product curve represents lower level of output.

Marginal rate of technical substitution
The rate at which one factor of production can be substituted for the other to obtain same output is known as marginal rate of technical substitution.It is a slope where the amount of one input A that a firm is able to give up in return for unit of another input B with no change in total output.

Properties of isoquant
a)It slopes downward from left to right .
b)It is convex to the origin .
c) Two isoquants cannot cut each other.
d) Higher the isoquant ,higher the level of output.

Producer's equilibrium
A producer is said to be in equilibrium when he is producing the desired output at the least possible cost. A producer's isoquant map helps in finding a producer's equilibrium.
The producer aims at producing the lebel of output at which his costs are the least. He desires to minimize his cost for producing given level of output. He will choose the combination of inputs which maximises his costs because only this can help him in earning maximum profits.
A producer is in short said to be in equilibrium where the marginal rate of technical substitution of two inputs is equal to ratio of prices of these inputs. 

The point of equilibrium satisfies that condition that:
Marginal technical rate of substitution of labour l for capital k is 
                                   price of labour l                MRT kl =MRT kl =   ___________________
                                    Price of capital k


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