noun. a line formed along the highest points of a mountain ridge. an area of higher ground separating two adjacent streams or watersheds.
What is ridge line state the economic region of production?
The ridge lines A and B demarcate the technically efficient region of production. Above the line OA and below the line OB slope of the isoquants is positive which means that increases in both capital and labour are required to produce a given fixed quantity of output.
What are ridge lines only those portions of the isoquant lying between the ridge lines are relevant to production explain with suitable diagrams?
The area of rational operation may be shown by drawing two lines from the origin enclosing only those parts of the isoquants where each factor has a positive marginal product. Such lines are called ridge lines. Negative marginal products appear in that part of the isoquant which has a positive slope.
What is the usefulness of ridge lines?
Ridge lines eliminate economically irrelevant input combinations and encompass economically feasible range of production.
What is ISO cost line?
Iso-cost line represents the price of factors along with the amount of money an organization is willing to spend on factors. In other words, it shows different combinations of factors that can be purchased at a certain amount of money.
What is ISO cost line in economics?
What is ridge line and valley line?
Valley Contour Lines A valley is an elongated depression in the landscape that is formed by the action of water (V-shaped) or carved out by glaciers (U-shaped). Two ridge lines run north-south connecting peaks on either side of the valley. Steep gullies and spurs run from ridge lines to valley bottom.
What are the boundaries of a ridge line?
These lines are called ridge lines. They give the boundaries of the economic region of production where input substitution takes place. Any point on the isoquants outside the upper ridge line OR and the lower ridge line OL constitute uneconomic region of production. Production must take place inside the ridge lines.
What is the importance of ridge line in production?
The upper ridge line passes through those points of the isoquants where marginal productivity of capital is zero and the lower isoquant passes though those points of the isoquants where marginal productivity of labour is zero. Here it is assumed that the vertical axis measures capital and the horizontal axis measures labour.
When do the ridge lines become positively sloping?
The ridge lines are the combination of points where marginal product (MP LK) of one of the factors is zero. The theory entails that there is a limit to how much one factor can be substituted for another. When production reaches a point where substitution between the factors becomes impossible (MP LK ), the isoquant becomes positively sloping.
Where do ridge lines produce in the isoquants curve?
The ridge lines are the locus of points of isoquants where the marginal products (MP) of factors are zero. The upper ridge line implies zero MP of capital and the lower ridge line implies zero MP of labour. Production techniques are only efficient inside the ridge lines.
