AP Notes, Outlines, Study Guides, Vocabulary, Practice Exams and more!

Isocost Line

isocost - line showing all combos of labor and capital bought for a given cost  

  • rental rate - r, given to certain equipment to quantify capital
  • C = wL + rK
    • MPL/MPK = w/r = MRTS

cost-minimization - finding lowest isocost curve intersecting given isoquant  

  • found at point of tangency between isoquant and isocost
  • expansion path - curve passing through cost minimization points (points of tangency between isocost and isoquant)
    • long-run total cost curve derived from expansion path
    • shows combinations of labor/capital that the firm needs at each output level, will increase if labor/capital increase w/ output
Subject: 
Economics
Subject X2: 
Economics

Need Help?

We hope your visit has been a productive one. If you're having any problems, or would like to give some feedback, we'd love to hear from you.

For general help, questions, and suggestions, try our dedicated support forums.

If you need to contact the Course-Notes.Org web experience team, please use our contact form.

Need Notes?

While we strive to provide the most comprehensive notes for as many high school textbooks as possible, there are certainly going to be some that we miss. Drop us a note and let us know which textbooks you need. Be sure to include which edition of the textbook you are using! If we see enough demand, we'll do whatever we can to get those notes up on the site for you!