The following graph shows isoquants for the technologically efficient bundles of labor and capital for producing 100 and 200 units of output (labeledIQ(Q=100)andIQ(Q=200) , respectively). Suppose the firm is initially using the cost-minimizing bundle of labor and capital for producing 100 units of output, represented by point A.

Assume that the expansion path is a straight line in this case. Use the blue line (circle symbols) to show the expansion path for this firm on the graph.

Graph: See Graph below.

\fShort-Run Costs Quantity Long-Run Costs (Dollars) (Dollars) Produced (Capital is ) (Capital is 0 100 200 O 9 P W\f