This chapter deals with how producers choose a combination of inputs to keep production costs as low as possible for a given output level. It also addresses the choice of technology: the robots are coming, and they may challenge traditional ways of doing things. The exercises in this chapter will help you become more familiar with the key tools in this analysis, namely the isocost and the isoquant. How do changes in input prices affect the choice of input mix? Should firms respond to high labour costs by moving production to a low-cost country, or by investing in new, labour-saving technology at home?