Figure 7.3.1
-Refer to Figure 7.3.1 above. Which point on the graph shows the optimal combination of inputs?
A) Point A, when the production process is capital intensive
B) Point B
C) Point D, when the production process is capital intensive
D) All three points, A, B and D are optimal

Question

Figure 7.3.1
-Refer to Figure 7.3.1 above. Which point on the graph shows the optimal combination of inputs?
A) Point A, when the production process is capital intensive 
B) Point B 
C) Point D, when the production process is capital intensive 
D) All three points, A, B and D are optimal

Quizplus · Accepted Answer

Point B represents the optimal combination of inputs because it is where the isoquant is tangent to the isocost line, maximizing output while minimizing cost.

Figure 7.3.1 -Refer to Figure 7.3.1 Above. Which Point on the Graph