If the cost of labor increases,the isocost line will
A) stay the same.
B) shift outward in parallel fashion.
C) rotate inward around the point where only capital is employed in production.
D) shift inward in parallel fashion.

Question

Quizplus · Accepted Answer

If the cost of labor increases, the isocost line will rotate inward around the point where only capital is employed, as the firm can afford less labor for the same cost.

If the Cost of Labor Increases,the Isocost Line Will