If a firm is operating at the point of tangency between an isoquant and an isocost line, its production is:
A) technically efficient but economically inefficient.
B) technically inefficient but economically efficient.
C) both technically and economically efficient.
D) both technically and economically inefficient.

Question

Quizplus · Accepted Answer

At the point of tangency between an isoquant and an isocost line, the firm is producing the maximum output for the given cost, achieving both technical and economic efficiency.

If a Firm Is Operating at the Point of Tangency