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  • Isoprofit Curve

Isoprofit Curves as the Firm's Indifference Curves

Isoprofit curves can be conceptualized as the firm's equivalent of a consumer's indifference curves. Just as an indifference curve connects combinations of goods that yield the same utility for a consumer, an isoprofit curve connects all combinations of a firm's choice variables—such as wage and employment, or price and quantity—that result in the same level of total profit. Consequently, the firm is indifferent to any of the specific combinations along a single isoprofit curve, as each point represents an identical profit outcome.

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Economics

Introduction to Microeconomics Course

The Economy 2.0 Microeconomics @ CORE Econ

Ch.6 The firm and its employees - The Economy 2.0 Microeconomics @ CORE Econ

Ch.7 The firm and its customers - The Economy 2.0 Microeconomics @ CORE Econ

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Learn After

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    • Point A: A feasible combination on the demand curve, lying on an isoprofit curve for $50,000 profit.
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