Question: You are given the following data: Cost= _ C = $12,000.00 w =$100.00 per unit of labor r =$100.00 per unit of capital These data

You are given the following data:

Cost= _

C = $12,000.00

w =$100.00 per unit of labor

r =$100.00 per unit of capital

These data are used to construct the iso cost line (C^1) in the diagram to the right.

Suppose the wage increases to $300.00 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' = $300.00, r = $100.00), how much have costs changed if the set of input choices remains at point A ? $ _____

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