On an isoquant/isocost graph, the least cost input combination of producing a given output is
A)any point on the isoquant curve.
B)any point on the isocost line.
C)given by the tangency between the isoquant curve and the isocost line.
D)one of the intercept values on the graph.

Question

Quizplus · Accepted Answer

The least cost input combination of producing a given output is given by the tangency between the isoquant curve (which represents the output level) and the isocost line (which represents the cost of inputs). At this point, the cost of inputs is minimized for the given level of output. Therefore, the correct choice is C, i.e. the tangency point between the isoquant curve and the isocost line. The other choices are not correct as any point on the isoquant curve or the isocost line may not necessarily represent the least cost input combination, and the intercept values do not provide any information about the input combination.

On an Isoquant/isocost Graph, the Least Cost Input Combination of Producing