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If an Isocost Line Cuts Through the Isoquant Line, a Cost

Question 35

Multiple Choice

If an Isocost line cuts through the Isoquant line, a cost minimizing firm will:


A) Choose the factor input combination at the intersection on the higher point of the Isoquant.
B) Choose the factor input combination at the intersection on the lower point of the Isoquant. Use the input bundle associated with the intersection on the lower point of the Isoquant.
C) Choose any combination of the factors between where the Isocost line cuts through the isoquant line.
D) Use a lower Isocost line to select the combination of inputs.

Correct Answer:

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