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EC311 · Intermediate Microeconomics

EC311 / TOPIC 20

6.2 Isoquants, least cost and substitution

A teaching model for this topic. Its illustrative numbers may differ from the worked question.

1 Predict → 2 Try → 3 Explain → 4 Challenge

How can a firm respond to higher wages at unchanged output?

Illustrative model numbers, not Thailand or current economic data.

Wages rise with the capital rental rate fixed. What happens to L and K?