Production costs for a given output will be minimized when the
A)budget line and the product indifference curve meet in the vertical axis.
B)budget line crosses the product indifference curve.
C)budget line begins to bend back on itself.
D)product indifference curve and the budget line are tangent.

Question

Quizplus · Accepted Answer

The point of tangency between the product indifference curve and the budget line represents the optimal production point where the producer is using the least amount of inputs to produce a given level of output. Therefore, production costs will be minimized at this point.

Production Costs for a Given Output Will Be Minimized When