The expansion path shows the lowest cost combinations of inputs for producing different levels of output.

Question

Quizplus · Accepted Answer

The statement is true. The expansion path is a graphical representation that shows the optimal combination of inputs to produce various levels of output while minimizing the total cost of production. It is a downward sloping curve reflecting the inverse relationship between the cost of production and the level of output.

The Expansion Path Shows the Lowest Cost Combinations of Inputs