An isocost line has a
A)positive slope because the two inputs can replace each other in production.
B)negative slope because the two inputs can replace each other in production.
C)negative slope because the two inputs are complementary to each other in production.
D)positive slope because the two inputs are complementary to each other in production.
E)slope equal to zero because the two inputs are ally identical.

Question

Quizplus · Accepted Answer

An isocost line represents all the combinations of two inputs that give a certain total cost. As the price of one input increases, the firm must use less of that input and more of the other input in order to maintain the same level of cost. This means that the two inputs can replace each other in production, resulting in a negative slope to the isocost line.

An Isocost Line Has a