An isoquant curve is the set of input bundles such that:
A)the total cost is the same.
B)the level of output is the same.
C)the rate of technical substitution is the same.
D)the economies of scale are the same.

Question

Quizplus · Accepted Answer

An isoquant curve represents a level of output, so all input bundles on that curve will produce the same level of output. Therefore, choice B is the correct answer. Choice A is incorrect because the total cost may vary for input bundles that produce the same level of output but have different input quantities. Choice C is incorrect because the rate of technical substitution (RTS) may vary along an isoquant curve as the firm substitutes inputs to maintain the same level of output. Finally, choice D is incorrect because economies of scale refer to changes in output as the firm changes all inputs proportionally, whereas isoquant curves hold output constant and only vary inputs.

An Isoquant Curve Is the Set of Input Bundles Such