If an isocost line crosses the isoquant twice, a cost minimizing firm will
A) use a different isocost line to select the bundle of inputs.
B) use the input bundle associated with the intersection on the higher point of the isoquant.
C) use the input bundle associated with the intersection on the lower point of the isoquant.
D) Both B and C.
A
Economics
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What is an average cost pricing rule? Why do regulatory agencies use it for natural monopolies?
What will be an ideal response?
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