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. Afirm produces output using capital and labor. The iirm's...
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Afirm produces output using capital and labor. The iirm's marginal product of labor [MPO is 30 and its marginal product of capital (MPK) is 21. Suppose the wage per unit of labor (w) is $6.00 and the cost per unit of capital (r) is $3.00. Is the firm minimizing the cost of production? What should the firm do: if anything. to
produce the same level ofoutput at lower cost? The firm [:1 A. is not minimizing the cost of production and should use more capital and more labor.
[:1 E. is not minimizing the cost of production and should useless capital and more labor.
[:1 C. is not minimizing the cost of production and should use more capital and less labor.
[:1 D. is minimizing the cost of production and should use less capital and less labor. [:1 E. is minimizing the cost ofproduction and should not change its use of capital and labor.
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