The Figure Below Shows the Isocost Lines Facing a Firm

question 114

Multiple Choice

The figure below shows the isocost lines facing a firm producing golf tees. FIGURE 8-5
-Refer to Figure 8-5.If the cost-minimizing firm is initially producing at a point on isocost line 1 and then moves to a point on isocost line 3,we can say that

• A)the per unit prices of capital and labour have each doubled.
• B)the output of golf tees has doubled.
• C)the per unit prices of capital and labour have fallen by 50%.
• D)the firm's level of output has increased.
• E)the firm is producing more efficiently.

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