Refer to Figure 7.8. The firm is currently along isocost CD. If the price of capital is $10, then the price of labor is

A) $10.
B) $20.
C) $80.
D) indeterminate from this information.

Isocost Line

Represents all combinations of inputs that cost the same amount for a firm, illustrating budget constraints in production theory.

Price of Capital

The cost of using capital assets in production, which can include interest rates on loans or opportunity costs of using owned capital.

Price of Labor

The wage or salary paid for the services of an employee or worker; essentially the cost of hiring labor.