Question 11 10 1700s (isocost FG) . Steep isocost: relative price of labour to coal is high. . A-technology now lower cost than the B-technology. G . We know this because B lies outside the line FG. 1600s (isocost HJ) Tonnes of coal . Firms use technology B. W D UT . At this relative price, no incentive to develop technology A. . We know this because A costs more (it lies outside the line H P N H 1 2 3 4 5 6 7 8 9 10 11 12 13 Number of workers "Look at the three isocost lines in Figure 2.8. Based on this information, what can we conclude?" O Isocost HJ represents a higher (wage/price of coal) ratio than isocost FG. Isocosts MN and FG represent the same price ratio (wage/price of coal) but different total costs of production. Isocost HJ represents all points that can produce 100 metres of cloth at a particular price ratio. When the wage is f10 and the price of coal is f5, the combination of inputs at point N is more costly than the inputs at point B