Refer to Figure 8-6.Suppose this firm is producing 3000 golf tees and is at point F on the isoquant map.In order to maintain its output and minimize costs this firm should
A)not change its use of factors.
B)move to an isoquant closer to the origin.
C)move to an isocost line further from the origin.
D)employ more labour and less capital.
E)employ more capital and less labour.

Question

Quizplus · Accepted Answer

To minimize costs while maintaining output, the firm should adjust its input combination to the point where the isoquant is tangent to the lowest possible isocost line. This typically involves employing more capital and less labor if the current point is not optimal.