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A line connecting the points of tangency between successive isoquants and iso-cost lines is known as the firm's______.

a. Perfect substitutes.
b. Expansion path
c. Constant returns to scale
d. Demand curve

1 Answer

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Final answer:

The line connecting the points of tangency between successive isoquants and iso-cost lines is known as the firm's expansion path.

Step-by-step explanation:

The line connecting the points of tangency between successive isoquants and iso-cost lines is known as the firm's expansion path. This path represents the various combinations of inputs that the firm can use to produce a given level of output while minimizing costs. It shows how the firm can expand production by adjusting the quantities of inputs in response to changes in output and input prices.

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