Combination of two inputs which yield the same amount of output
Combination of two inputs which cost the same amount to a firm
Combination of two inputs which yield varying amounts of output
Combination of two inputs which cost different amount of outlay to a firm
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Answer is Wrong!
The correct answer is: A. Combination of two inputs which yield the same amount of output.
An isocost line is a line that shows all the combinations of two inputs that a firm can purchase with a given budget. The slope of the isocost line is equal to the negative of the ratio of the prices of the two inputs. This means that the firm can only move to a higher isocost line if it is willing to spend more money.
The isocost line is a useful tool for understanding the trade-offs that a firm faces when it is trying to produce a given level of output. The firm can choose to use more of one input and less of the other, but it will only be able to do this if
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