Please explain how to solve and graph this problem:

You are given the following?data:

Cost?= C ?= ?$1,200.00

w=?$10.00 per unit of labor

r=?$10.00 per unit of capital

These data are used to construct the isocost line ?(C1?) in the diagram to the right.

Suppose the wage increases to ?$20.00 but that the firm chooses to keep using the same amount of labor and capital to produce 200 units of output.

Given this new set of factor prices ?(w?'=?$20.00?, r=?$10.00?), how much have costs changed if the set of input choices remains at point?A? ?

?(Enter a numeric response using a real number rounded to two decimal?places.)

Use the line drawing tool to draw a new isocost line showing an increase in w to ?$20.00?, given the firm chooses to keep using the same amount of labor and capital to produce 200 units of output. Label this line ?'C2?'.

Carefully follow the instructions?above, and only draw the required objects.?

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