If capital and labor are perfect substitutes in a production function, the isoquants for this function will be
A)Concave from above
B)Convex from above
C)A straight line
D)Any one of the above depending on the particular combination of labor and capital employed

Question

Quizplus · Accepted Answer

If capital and labor are perfect substitutes in a production function, it means that one unit of capital can replace one unit of labor without affecting the total output. Therefore, the isoquants will be linear, and any combination of capital and labor that gives the same output will lie on a straight line. Thus, the correct answer is C, i.e., the isoquants will be a straight line.

If Capital and Labor Are Perfect Substitutes in a Production