If an Isocost Line Cuts Through the Isoquant Line, a Cost-Minimising

question 47

Multiple Choice

If an isocost line cuts through the isoquant line, a cost-minimising firm will

• A) choose the factor input combination at the intersection on the higher point of the isoquant.
• B) choose the factor input combination at the intersection on the lower point of the isoquant. Use the input bundle associated with the intersection on the lower point of the isoquant.
• C) choose any combination of the factors between where the isocost line cuts through the isoquant line.
• D) use a lower isocost line to select the combination of inputs.

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