1 1 2. Suppose a producer's production function is F(K, L) = 3KZL The cost of K is 20 (r = 20) and the cost of L is 80 (w = 80) The firm wants to produce 30 units of output. a. What is the cost-minimizing way for the firm to produce 30 units of output? How many units of capital and how many units of labor should be used?

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Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.