10. Given the equation K = 2000 – 250L, calculate the combination of capital and labour between L = 1 and L = 10 which would produce an output with a total cost of €400. Draw the resulting isocost curve with this data.

On your diagram draw a series of isoquants and explain how a business would either find the point where they minimized total cost given a constraint on output or maximize output given a budget constraint.