If an Isoquant Intersects an Isocost Line at Two Points

question 55

Multiple Choice

If an isoquant intersects an isocost line at two points, a manager can surmise that:

• A) there is a lower isocost line where the isoquant will intersect at only one point
• B) no least cost combination is possible
• C) there are two choices of least-cost input combinations
• D) none of the other three answers

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Definitions:

Explicitly Colludes

A situation where companies or individuals openly agree to work together, often illegally, to manipulate prices or markets.

Price-and-quantity-fixing

Practices by which firms set the price and output levels to control market conditions, often regarded as anti-competitive.

Collusion

A secret or illegal cooperation or conspiracy, especially between firms, to deceive or gain an unfair advantage.

Demand Curve

The Demand Curve depicts the relationship between the price of a product and the amount of it that consumers are willing to purchase at various prices, usually sloping downward from left to right.