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ISOCOST
In economics an isocost line represents a set of input bundles each which all cost the same amount. Although similar to the budget constraint in consumer theory, the use of the isocost pertains to cost-minimization in production, as opposed to utility-maximization. The typical isocost line represents the ratio of costs of labour and capital, so the formula is often written as:
Where w represents the wage of labour, and r represents the rental rate of capital. The slope is:
or the negative ratio of wages divided by rental fees.
The isocost line is combined with the isoquant line to provide the optimization problem.
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