The least-cost combination of factors for producing a given output occurs at the point where:

1. Producer's equilibrium is found by superimposing the chosen isoquant on the iso-cost lines. 2. Cost is minimised at the point where the isoquant is tangent to an iso-cost line; all other points on the isoquant lie on higher iso-cost lines. 3. So the least-cost combination is the tangency point. 4. An isoquant cutting the line twice means a costlier point, isoquants never intersect, and the axis intercept is just a corner combination, not the optimum. _Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 3 Unit I "Theory of Production", p.24_