On an isoquant/isocost graph, the least cost input combination of producing a given output is
A) any point on the isoquant curve.
B) any point on the isocost curve.
C) given by the tangency between the isoquant curve and the isocost line.
D) one of the intercept values on the graph.

Question

Quizplus · Accepted Answer

The least cost input combination for producing a given output occurs at the point where the isoquant curve is tangent to the isocost line. This is because at this point, the cost of inputs is minimized while still producing the desired level of output. Any point on the isoquant curve or isocost line may not necessarily represent the least cost input combination, and intercept values do not necessarily correspond to efficient production points.

On an Isoquant/isocost Graph, the Least Cost Input Combination of Producing