K 6 isocost 3 L Based on the information in the graph aboive, what is the slope of the isocost line? slope = -2 If the price of capital remains the same and the price of labor decreases, the isocost line will become steeper. With the current mix of labor and capital, the marginal technical rate of subsitution is MRTS, =3. If the prices of L,K labor and capital remain as shown in the graph, then the firm will minimize the cost of production by increasing labor and decreasing capital
K 6 isocost 3 L Based on the information in the graph aboive, what is the slope of the isocost line? slope = -2 If the price of capital remains the same and the price of labor decreases, the isocost line will become steeper. With the current mix of labor and capital, the marginal technical rate of subsitution is MRTS, =3. If the prices of L,K labor and capital remain as shown in the graph, then the firm will minimize the cost of production by increasing labor and decreasing capital
Calculus: Early Transcendentals
8th Edition
ISBN:9781285741550
Author:James Stewart
Publisher:James Stewart
Chapter1: Functions And Models
Section: Chapter Questions
Problem 1RCC: (a) What is a function? What are its domain and range? (b) What is the graph of a function? (c) How...
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Transcribed Image Text:KA
16
isocost
3
L
Based on the information in the graph aboive, what is the slope of the isocost line?
slope
-2
If the price of capital remains the same and the price of labor decreases, the isocost line will
become steeper.
=
With the current mix of labor and capital, the marginal technical rate of subsitution is MRTS =3. If the prices of
L,K
labor and capital remain as shown in the graph, then the firm will minimize the cost of production by
increasing labor and decreasing capital
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