Suppose the factor cost ratio (slope of the iso costs lines) changes because the cost per unit of capital increases from Rk to Rk₂. The firm will now face a new set of isocost lines with different slopes (the same change in slope could have resulted from a fall in the cost of labor.) If the firm continues using method B it will be on the blue isocost line. The same output can be produced at a lower cost by using a different capital-labor mix, so the firm can reduce costs and maintain output by hiring more labor and less capital.