To find the profit-maximizing input combination, a firm should:

Question

Quizplus · Accepted Answer

In order to maximize profits, a firm should aim to produce at the point where the slope of the isocost line (representing the cost of inputs) is equal to the slope of the isoquant (representing the productivity of inputs). This is because at this point, the firm is minimizing its costs while also producing at the highest possible level of output. Therefore, setting the slope of the isocost line equal to the slope of the isoquant is the best choice for finding the profit-maximizing input combination.

To Find the Profit-Maximizing Input Combination, a Firm Should