Refer to the information provided in Figure 10.2 below to answer the question(s) that follow. 
Figure 10.2
-Refer to Figure 10.2. This firm's marginal cost curve has shifted from MC0 to MC1. A profit-maximizing firm should ________ the amount of output produced and ________ its demand for labor.
Definitions:
Respiratory Membrane
The respiratory membrane is the thin barrier in the lungs where gas exchange occurs, allowing oxygen to enter the blood and carbon dioxide to be expelled.
Diffusion Coefficient
Measure of how easily a gas diffuses through a liquid or tissue.
Surface Tension
The elastic tendency of a fluid surface which makes it acquire the least surface area possible.
Lung Recoil
Decrease in the size of an expanded lung as a result of a decrease in the size (volume) of its alveoli; due to elastic recoil of elastic fibers surrounding alveoli and water surface tension of a thin film of water within alveoli.
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