Question

Isocost lines Question 28 options: A) are dependent upon the costs of a firm's inputs. B) are dependent upon the technical efficiency of the production function. C) are the same as budget lines. D) are dependent upon the quantity of goods a firm wants to produce.

Answer 1

Answer:

A. are dependent upon the costs of a firm's inputs

Explanation:

Isocosts are lines showing the various combinations of inputs which costs the same total amount. That is, all inputs combinations with similar cost. It indicates a combination of inputs that an organization or firm can buy or rent at a given cost/price. The isocosts are simply dependent upon the cost of the firm's input, that is to say, the cost of inputs determines the various combination possible. Isocost becomes very important when analyzing a firm's or producer's behavior.