13) Consider a technology exhibiting diminishing MRTS. If capital is fixed, but a firm varies labor A) the firm stays on the same isoquant. B) the firm moves to a new isoquant. C) the firm might move to a new isoquant, depending on how much labor is added. D) the firm's output will not change E) None of the above .

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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.