I am so confused at the moment as I can't seem to figure out whether MRTS (i.e. the slope of the firm's isoquant) is MPL/MPK or MPK/MPL. At first I thought I cleared it up as it would probably depend on the axes of the graph (I think), but then I find that both are used just as much no matter where I look. For instance, I have shown two images below. One from my lecture and another from a google search. enter image description here

enter image description here

Similarly, is the slope of the isocost therefore w/r or r/w (where r is price of capital and w is price of labour)?


Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Browse other questions tagged or ask your own question.