Isocost line
•It is also called price line, budget line, iso-outlay line, factor cost line
•Isocost line defines all possible combination of two resources which can be purchased with the given outlay of funds
Characteristics of Isocost line:
•As the outay increases the isocost line moves away from the origin
•Isocost line is a straight line because input prices donot change with the quantity purchased
•The slope of isocost line represents price ratio.
•Where,
•Price ratio (x1x2)=Px1/Px2


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