A manager can minimize production costs by operating at a point where:

Question

Quizplus · Accepted Answer

When the isoquant is tangent to the isocost line, it means the firm is using the least costly combination of inputs to produce a given level of output. This minimizes production costs while maintaining the same level of output. Option B is incorrect because it is impossible for an isoquant to be equal to zero. Option C is incorrect because an isoquant cannot be tangent to the origin. Option D is incorrect because there is enough information given to make a decision.

A Manager Can Minimize Production Costs by Operating at a Point