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29 June, 10:42

An isocost line is a curve that shows all combinations of labor and capital that are available for a given total cost

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  1. 29 June, 11:06
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    The above statement is TRUE

    Explanation:

    Isocost Line shows input/factor combinations (here - labor & capital) which are of same Total Cost / budget to the producer, given factors price.

    It is analogous to Consumer's Budget Line Constraint (representing product combinations satisfying their income budget).

    It is an important component of Producer's Equilibrium : Producer is at equilibrium where Isocost is tangent to Isoquant (representing input / factor combinations yielding same level of production quantity - analogous to consumer's indifference curve showing production combinations offering same consumer satisfaction).

    Tangency of Iscost line to Isoquant curve gives Producer Equilibrium.
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