In theory, a cost-minimizing firm will choose

Question

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The lowest isocost line would not be optimal as it would result in lower output and higher cost. Option A is not a feasible choice as the firm needs to produce output to generate revenue. Option D would result in sub-optimal production as it would not minimize costs. Therefore, the best choice is to choose the highest isocost line tangential to the relevant isoquant as it allows the firm to produce the desired level of output at the lowest possible cost.

In Theory, a Cost-Minimizing Firm Will Choose