Question

A political campaign manager must decide whether to emphasize television advertisements or letters to potential voters in a reelection campaign. Describe the production function for campaign votes. How might information about this function (such as the shape of the isoquants) help the campaign manager to plan strategy?

Short answer

The campaign manager’s production function is described by the shape of isoquant, which could be linear, convex, or L-shaped.

Based on the shape, the manager can plan the correct amount of advertising or letters that can be used for a reelection campaign.

Step-by-step solution

The explanation for isoquant 

An isoquant shows different combinations of inputs that produce a particular level of output. A series of isoquants illustrating different output levels gives an idea about a firm’s production function.

The shape of the isoquant depends on the marginal rate of technical substitution between inputs. The curve is downward sloping as the marginal product of inputs is positive.

The shape of isoquants

Here, the output of the campaign manager is the number of voters, and the available inputs are television advertising and direct mail. The campaign manager requires the knowledge of substitution possibilities between the two inputs to estimate his production function.

For instance, if the inputs are perfect substitutes, the isoquant will be a straight line. The manager will choose only one input based on relative prices in such a case.

Again, if the inputs are imperfect substitutes, then the isoquants will have a convex shape. In such a case, the manager will choose a combination of both inputs at the least cost.

Again, if the inputs are perfect complements, the isoquants will be L-shaped. In this case, the manager will produce at the kink on the curve and use the inputs at a fixed proportion.