Assertion (A): An iso-cost line is a straight line. Reason (R): The market rate of exchange between the two inputs is constant.

CA Foundation · Business Economics · MTP · January 2025
Assertion (A): An iso-cost line is a straight line. Reason (R): The market rate of exchange between the two inputs is constant.
(A) A. (A) is true and (R) is false
(B) B. Both (A) and (R) are true & (R) is the correct explanation of (A)
(C) C. Both (A) and (R) are true & (R) is not the correct explanation of (A)
(D) D. (A) is false and (R) is true

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Both (A) and (R) are true & (R) is the correct explanation of (A)

Topics: Theory of Production and Cost

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