Concerning the maximization of output subject to a cost constraint,which of the following statements (if any)are true?

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Quizplus · Accepted Answer

All the statements are true regarding the maximization of output subject to a cost constraint. At the optimal input combination, the slope of the isoquant (which represents the rate at which one input can be substituted for another without changing the output level) must equal the slope of the isocost line (which represents all combinations of inputs that can be purchased for a given total cost). This condition ensures that the firm is using its resources in the most efficient way possible. The optimal solution indeed occurs at the point where the isoquant is tangent to the isocost line, indicating the most efficient combination of inputs for a given level of output and cost. This point typically lies within the feasible region of input combinations, but the statement about the boundary of the feasible region is more related to the concept of constraints in optimization problems rather than a specific characteristic of the optimal solution in the context of isoquants and isocost lines.

Concerning the Maximization of Output Subject to a Cost Constraint,which