The point of tangency between a convex isoquant and an isocost line represents an optimal combination of inputs.

Name: The point of tangency between a convex isoquant and an isocost line represents an optimal combination of inputs.
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Question

Quizplus · Accepted Answer

At the point of tangency, the slope of the isoquant equals the slope of the isocost line, indicating that the firm is minimizing cost for a given level of output, which is an optimal combination of inputs.

The Point of Tangency Between a Convex Isoquant and an Isocost