The shape of the isoquant is important. If the firm reduces its workforce from 12 to 9 workers it only needs to add two units of Capital to maintain its 25 chair output. When reducing from 9 to 6 it neeeds 3 units of capital to substitute for 3 workers and when it drops from 6 to 3 workers it must add an additional 5 units of capital.

    The same process occurs when the firm reduces capital. Only three workers are needed to substitute for the two capital units lost when reducing from 8 to 6 units of capital but when reducing from 6 to 4 units of capital the firm must add 5 additional workers to maintain output.

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