To derive the equation for an isocost line when the level of capital is plotted on the vertical axis and the level of labor is plotted on the horizontal axis, you should
A) solve the production function for $ K $.
B) solve the production function for $ L $ .
C) solve the total cost equation for $ K $ .
D) solve the total cost equation for $ L $ .

Question

Quizplus · Accepted Answer

The isocost line represents combinations of capital (K) and labor (L) that result in the same total cost. To derive the equation for an isocost line with capital on the vertical axis, solve the total cost equation for K.

To Derive the Equation for an Isocost Line When the Level