Question

point of tangency between isoquant and isocost denotes

Answer 1

The slope of isocost line must equal the slope of isoquant.

Answer 2

The point of tangency between an isoquant and isocost denotes the lowest cost combination inputs.

• To evaluate the optimum production point at any given output level, the isocost line is combined with the isoquant map.
• The tangency point between any isoquant and the isocost line provides the lowest-cost combination of inputs capable of producing the output level associated with the isoquant.
• It provides the maximum output level that can be produced for a given total input cost. The expansion direction is called a line connecting tangency points of isoquants and isocosts with the constant input prices.