A firm can minimize the total costs of producing a given output level at the point of tangency between an isoquant and the isocost line.

Question

Quizplus · Accepted Answer

The point of tangency between the isoquant and isocost line represents the combination of inputs that result in the lowest possible cost for producing a given level of output. Therefore, a firm can minimize its total costs by producing at this point.

A Firm Can Minimize the Total Costs of Producing a Given