The term least-cost solution does not describe one specific principle in economics. Least-cost solution covers a wide diversity of economical topics that help form an ultimate solution. The term can be introduced in the context of a firms aim and objectives e.g. "profit maximization". In many cases firms may have other objectives such as providing quality to customers and thus may adopt techniques such as total quality management (TQM). Organizations such as Banks often …
showed first 75 words of 1187 total

showed last 75 words of 1187 total
…The isocost line (see Figure 5) helps firms solve which least cost technique of production is to produce a specific level of output. In order to find the least-cost combination factors to produce a certain level of output, the isoquant must be drawn as in Figure 6. The least cost solution is at point x as it is the point where the isoquant just touches the lowest possible isocost as a tangent. See figure 7. Figure 5 Figure 6 Figure 7