This figure indicates the amounts of capital and labor


A firm makes widgets using the technology represented by the isoquant map in the figure below.

This figure indicates the amounts of capital and labor needed to produce various quantities of widgets. The rental rate of capital, r, is $5 per unit of capital and the wage, w, is $5 per unit of labor. The firm initially selects the point a in the figure below, where it produces 100 units of output with 50 units of capital and 50 units of labor.

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Other Subject: This figure indicates the amounts of capital and labor
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