If the Cost of Capital Decreases, the Isocost Line Will

question 50

Multiple Choice

If the cost of capital decreases, the isocost line will

• A)stay the same.
• B)shift outward in parallel fashion.
• C)rotate outward around the point where only labor is employed in production.
• D)shift inward in parallel fashion.

---

Definitions:

Inferior Good

A type of good for which demand decreases as the income of consumers increases, in contrast to a normal good.

Law Of Demand

A fundamental principle stating that, all else being equal, as the price of a product decreases, the quantity demanded increases, and vice versa.

Price Falls

A decrease in the cost of a good or service in the market.

Quantity Demanded

The total amount of a good that consumers are willing to purchase at a given price level in a market.