When the Isocost Line Is Tangent to the Isoquant,then

question 13

Multiple Choice

When the isocost line is tangent to the isoquant,then

• A) MPL = MPₖ.
• B) the firm is producing that level of output at minimum cost.
• C) the firm has achieved the right economies of scale.
• D) All of the above.

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Definitions:

Monopolists

Entities with exclusive control over the supply of a particular good or service, setting prices and output levels.

Output Effect

The change in total output caused by a new price level, in the context of supply and demand.

Total Revenue

Total revenue is the full amount of money received by a company for its goods or services before any expenses are subtracted.

Average Revenue

Total revenue divided by the quantity sold