If we fix the capital at K, and increase the amount of labour employed, then what will happen?

We will reach a higher isoquant We will reach a lower isoquant Level of output increases Both 1 and 3

Both 1 and 3

An isoquant represent all the combination of inputs that produce the same level of output. So if we increase the quantity of one input employed, then we will have to decrease the quantity of other input employed in order to produce same level of output and remain on same isoquant. But if we increase one input and don’t decrease the other input, then the total amount of input employed increases and as a result the output also increases and this increased output is depicted by a higher isoquant.