Assume a Firm Faces These Costs: Total Cost of Capital

Assume a firm faces these costs: total cost of capital = $4,000; price paid for labor = $20 per labor unit; and price paid for raw materials = $8 per raw-material unit. Originally the firm produced 2,000 units of output by combining its fixed capital with 200 units of labor and 500 units of raw materials. Now the firm changes its production process so that it can produce 3,000 units of output by combining its fixed capital with 100 units of labor and 500 units of raw materials. What valid conclusion can be drawn about the effect and reasons for the change?

A) It improved economic efficiency because more units could be produced at a lower ATC using the same amount of economic resources.
B) It improved economic efficiency because more units could be produced at a lower ATC using fewer economic resources.
C) It improved economic efficiency because more units could be produced at the same ATC using fewer economic resources.
D) It reduced economic efficiency because fewer units could be produced at a higher ATC using more economic resources.