What happens to the isocost lines if the wage rate increases

Reference no: EM13234951

(a) If two firms face the same wage and rental price of capital but spend different amounts on labor and capital, how do their isocost lines differ? What happens to their isocost lines if the wage rate increases?

(b) If the wage rate increases, what happens to the capital-labor ratio used in production? Why?

Reference no: EM13234951

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