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Why Are the Slopes of Isocost Lines Constant

Question 36

Multiple Choice

Why are the slopes of isocost lines constant?


A) because firms must use capital and labor inputs in fixed proportions
B) because firms can hire as much of an input as they desire without changing wages or rental rates
C) because firms must use less labor if employing more capital
D) because the marginal rate of technical substitution of labor for capital is constant

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