The Production Theory in the long run.
a. Draw the isocost line corresponding to a total cost of $10,000 is: 50 L + 100 K. TC = w L + r K, where L is the quantity of labour, K is the quantity of capital, w is the price of labour, and r is the price of capital. And draw the isoquant curve on the same diagram when the output is Y1.
b. What are the conditions for cost-minimizing inputs to produce an output Y1?
c. Draw is the cost line when the price of capital increases to 200.