Isocost lines represent:
A)the same value for every firm in the industry.
B)are the same as implicit costs.
C)the same total expenditure on the inputs to the production process.
D)the sum of all past explicit costs

Question

Quizplus · Accepted Answer

Isocost lines are the combinations of inputs that cost the same amount. They represent the same total expenditure on inputs, allowing firms to produce at different levels of output while incurring the same cost. Therefore, option C is the correct choice. Option A is incorrect because isocost lines can vary between firms depending on their input prices. Option B is incorrect because implicit costs are not captured by isocost lines. Option D is incorrect because isocost lines only represent current input costs, not past costs. Isocost lines represent the combinations of inputs that give the same total expenditure on the inputs, which allows the firm to produce a given level of output at the lowest possible cost. Therefore, option C is correct. Options A, B, and D are incorrect.

Isocost Lines Represent