(Solution) - Suppose that a firm s cost per unit of labor is -(2025 Original AI-Free Solution)

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Suppose that a firm?s cost per unit of labor is $100 per day and its cost per unit of capital is $400 per day.
a. Draw the isocost line for a total cost per day of $2,000. Label the axes.
b. If this firm is producing efficiently, what is the marginal rate of technical substitution between labor and capital?
c. Demonstrate your answer to part (b) using isocost lines and isoquant curves