Sketch the firm isoquant and isocost lines

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Reference no: EM1361475

A firm currently uses 300 labor hours and 200 machine hours to produce 200 gizmos per month. The price of labor is $10 and the rental rate on machines is currently $15 per hour. The technical rate of technical substitution of capital for labor declines as capital is substituted for labor.
Draw the firm's isoquant and isocost lines and show its current equilibrium in the use of labor and machines when producing 200 gizmos per month.

Reference no: EM1361475

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