If a firm used a combination of inputs that was to the left of its isocost line,it would indicate that
A)it is exceeding its budget.
B)it is not spending all of its budget.
C)it is operating at its optimal point because it is saving money.
D)None of the above

Question

Quizplus · Accepted Answer

If a firm is using a combination of inputs that is to the left of its isocost line, it means that it is not spending all of its budget. This could be because the firm is producing at a level that requires lower amounts of inputs, or because the prices of the inputs have decreased, allowing the firm to save money. Either way, the firm is not exceeding its budget, as the cost of the inputs used is less than the budgeted amount.

If a Firm Used a Combination of Inputs That Was