Question

What is the slope of an iso-cost line equal to and why? Provide mathematical explanation

Answer 1

The slope of an iso-cost line is equal to the slope of an isoquant since the slope of an isoquant tells the firm how much capital is needed to replace a unit of labor to maintain the output while the slope of an iso-cost line shows the relative price of the inputs.

Slope=W/r

Where W is price of labour

r is the price of capital