Suppose in a graph, four production curves are drawn with an Isocost line touching the tangent of the curve, which shows the maximum a firm can produce. With higher budget expenditures, a firm can produce more products, so the equilibrium shifts from E to E1. As expenditures increase further, the producer reaches successively higher isoquants q2, q3 with new equilibrium points E2 and E3. The line joining these equilibrium points is known as the expansion path. The expansion path is the locus of tangency points between isocosts and isoquants. The expansion path back from the origin shows how the factor changes in response to the change in output, with the price factor remaining unchanged. Therefore, to achieve higher production, both factors must be taken into account. Each successive equilibrium point shows the least costly combination to produce that level of output. It is therefore the place of all the successive combinations of lower cost, depending on which a company can achieve a higher return. It is also known as the scale line because it shows how a producer changes the two factors of production....