the slope of the iso-cost line is
Answers
Answered by
0
Answer:
The isocost line represents all combinations of capital and labor that have the same total cost. Therefore, any values of capital and labor that the firm can choose must satisfy the equation on the left that you previously derived. Then slope of the isocost line is W/r or the relative price of the inputs.
Answered by
0
Explanation:
Wage (W) is the price a firm has to pay for labor and rent (r) is the price it has to pay for capital. The slope of an isocost line represents the cost of one factor of production in terms of the other. Rational firms want to minimize costs; that is, they want an isocost line close to the origin
Similar questions