Isocost

In microeconomics, the isocost line ( Isokostenlinie ) in the factor graph of the locus of all combinations of factor levels that lead to the same high costs. What is shown in the theory of production with the isocost line, is to be compared with the balance sheet line in the budget theory.

The position of the isocost line is determined by the ( given ) costs and factor prices. The isocost line is an important tool in determining the minimum cost combination. It is used for the term Isokostengeraden Isotime.

Calculation of Isokostenlinie / straight

When calculating the Isokostenlinie the predetermined price of a combination is divided by the respective prices of factors resources and labor. Here, the ordinate (y -axis) obtained from the value of labor and the abscissa (x - axis ) from the factor resources.