provide an isoquant/isocost analysis diagram explaining the possible impact of the higher wages on the output level, total cost of production and input-factor mix of this business in both the short and long-run estimated that the wage elasticity of labour demand is -1.7 and draw another isoquant/isocost analysis diagram and compare it provided that the long-run wage elasticity of labour demand was -0.4

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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.