Suppose some firm has decided it will produce the level of output given by the isoquant to the right. Its problem is to find the lowest cost production method on that isoquant.

    We show three methods on the graph to the right. Method A uses lots of capital (K3) and very little labor (L3). Method C, which costs as much as A since it's on the same isocost line uses lots of labor (L2) and very little captial(K2). Since both are also on the same isoquant they produce the same level of output.

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