Making a decision about technology requires economic information about relative pricesthe cost of hiring a worker relative to that of purchasing a tonne of coal.

The firm can calculate the cost of any combination of inputs that it might use by multiplying the number of workers by the wage and the tonnes of coal by the price of coal. We use the symbolwfor the wage,Lfor the number of workers,pfor the price of coal andRfor the tonnes of coal:

C= WL + PRcost = (wage x workers) + (price of a tonne of coal x number of tonnes) = (W X L) + (p x R)\fIsocost Lines 20 18 16 14 12 10 Isocost Line A 8 Isocost Line B 6 Isocost Line C ON A 0 2 4 6 8 10