A firm employs 100 units of labor and 50 units of capital to produce 200 widgets.Labor costs $10 per unit and capital costs $21 per unit.For the quantities of inputs employed,MPL = 3 and MPK = 3.In this situation,the firm:
A) is producing the maximum amount possible at the lowest possible cost.
B) could lower its production costs by using more capital and less labor.
C) could increase its output at no extra cost by using more labor and less capital.
D) should keep its input usage unchanged.
Correct Answer:
Verified
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