When a firm has the option of using two different inputs and it elects to use only one (e.g., labor), it will be at the vertical or horizontal intercept of its isocost line.

Question

Quizplus · Accepted Answer

When a firm chooses to use only one input, its isocost line will intersect the axis corresponding to the unused input at its intercept. This intercept will be either the vertical or the horizontal axis, depending on which input is not being used.

When a Firm Has the Option of Using Two Different